Offer a specific dollar amount that is roughly 30% of your outstanding account balance. The lender will probably counter with a higher percentage or dollar amount. If anything above 50% is suggested, consider trying to settle with a different creditor or simply put the money in savings to help pay future monthly bills.
How to Negotiate With Debt Collectors
Negotiating a debt settlement on your own is not easy, but it can save you time and money compared with hiring a debt settlement company. ... With do-it-yourself debt settlement, you negotiate directly with your creditors in an effort to settle your debt for less than you originally owed.
If you're not sure the debt collector you're dealing with is legit, here's how to respond:
One of those factors is the ability to prove liability on the part of the defendant who is offering to settle the case. ... Another factor is the ability of that defendant to prove that another party or even the plaintiff himself is partly responsible for the injuries in the case.
If the creditor reported you to the credit bureaus, your strategy has to be different. Ignoring the collection will make it hurt your score less over the years, but it will take seven years for it to fully fall off your report. Even paying it will do some damage—especially if the collection is from a year or two ago.
You only need to say a few things:
It is always better to pay off your debt in full if possible. While settling an account won't damage your credit as much as not paying at all, a status of "settled" on your credit report is still considered negative.
Sometimes the creditor will hire a collection agency to chase the money for them. Ask the debt collector if they own the debt. If not, you still might be able to negotiate with the original creditor. ... In this case, the debt collector owns the debt, so any payment is made to the collection agency.
You should be prepared to pay the settlement right away, according to the terms you agree upon. No matter what, "Getting all agreements in writing is an important part of the settlement," Morgan says.
Get professional help: Reach out to a nonprofit credit counseling agency that can set up a debt management plan. You'll pay the agency a set amount every month that goes toward each of your debts. The agency works to negotiate a lower bill or interest rate on your behalf and, in some cases, can get your debt canceled.
Yes, settling a debt instead of paying the full amount can affect your credit scores. ... Settling an account instead of paying it in full is considered negative because the creditor agreed to take a loss in accepting less than what it was owed.
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