Effective Settlement Negotiation
So the creditor has provided you with sufficient proof to validate your past due debt.
Now what?
Well, the last thing you want to do is ignore the account. One option you may want to
consider is to negotiate a settlement offer with the creditor.
Creditors do not want to have old debt lingering around. It makes their bottom line look
bad. Considering the age of the past due debt, the creditor may view getting something
paid on the account is better than getting nothing.
Even though the odds are in your favor, do not jump into a settlement negotiation without
having the money ready to pay. The creditor may agree to settle the debt but may require
that you submit your payment rather quickly.
When working out an arrangement to pay less than what is actually owed to a creditor, it is
absolutely important that the settlement agreement be in writing and that you receive such
a letter BEFORE you submit payment.
Now what?
Well, the last thing you want to do is ignore the account. One option you may want to
consider is to negotiate a settlement offer with the creditor.
Creditors do not want to have old debt lingering around. It makes their bottom line look
bad. Considering the age of the past due debt, the creditor may view getting something
paid on the account is better than getting nothing.
Even though the odds are in your favor, do not jump into a settlement negotiation without
having the money ready to pay. The creditor may agree to settle the debt but may require
that you submit your payment rather quickly.
When working out an arrangement to pay less than what is actually owed to a creditor, it is
absolutely important that the settlement agreement be in writing and that you receive such
a letter BEFORE you submit payment.
God Bless.
Carlos Cruz
Debt Credit Learning Center
Carlos Cruz
Debt Credit Learning Center
When working out a settlement
arrangement with a collection
agency, it is significant that the
specifics of the settlement be spelled
out in detail. It is of no value for a
collection agency to agree to delete
the negative mark on your credit
report without having the original
creditor agree to the same.
By having the original creditor delete
the file gets rid of the account
completely and it has a positive effect
on your credit score because it is as
though the credit line never took
place.
Your aim should be to make the
arrangement with a collection
agency, it is significant that the
specifics of the settlement be spelled
out in detail. It is of no value for a
collection agency to agree to delete
the negative mark on your credit
report without having the original
creditor agree to the same.
By having the original creditor delete
the file gets rid of the account
completely and it has a positive effect
on your credit score because it is as
though the credit line never took
place.
Your aim should be to make the
creditor appreciate your dire situation and make it crystal clear to the creditor that it is in
their best interest to accept your proposed settlement offer.
Explain to the creditor that if they refuse your settlement offer, you will have no choice but
to call the next creditor on your list and offer them the money.
Elucidate your point further by pushing the fact that you may not be able to raise this kind of
money again for a long while.
The settlement letter should also absolve you of all future financial responsibility towards
the account in question.
Request that the collection agency fax or mail you a letter that states that the collection
agency agrees to delete the collection account and delete the original creditor report. In
return, you agree to submit the negotiated dollar amount.
The original creditor can verify to the credit-reporting agency that the original debt was
placed in error and should not have gone to collections and instruct the agency to remove
the original account and the collection account.
Keep in mind that the consumer can demand that the trade be deleted only if the report was
made in error or is inaccurate.
Further, it is important to know that some creditors will refuse to delete an item because it
can be deceptive. Creditors rely on the credit bureaus for an accurate and complete record
of a consumer’s credit history to better assess a persons credit risk.
Understanding this, if complete deletion cannot be achieved, your aim should be for the
creditor to notify the credit bureau to mark the file as ‘Paid as agreed or ‘Paid with zero
balance’.
Negotiating a settlement with a creditor can be frustrating. Don’t lose sight of the fact that
you have something that the creditor wants (money) and they have something you want (a
better credit report). Finding a comfortable medium is the goal.
their best interest to accept your proposed settlement offer.
Explain to the creditor that if they refuse your settlement offer, you will have no choice but
to call the next creditor on your list and offer them the money.
Elucidate your point further by pushing the fact that you may not be able to raise this kind of
money again for a long while.
The settlement letter should also absolve you of all future financial responsibility towards
the account in question.
Request that the collection agency fax or mail you a letter that states that the collection
agency agrees to delete the collection account and delete the original creditor report. In
return, you agree to submit the negotiated dollar amount.
The original creditor can verify to the credit-reporting agency that the original debt was
placed in error and should not have gone to collections and instruct the agency to remove
the original account and the collection account.
Keep in mind that the consumer can demand that the trade be deleted only if the report was
made in error or is inaccurate.
Further, it is important to know that some creditors will refuse to delete an item because it
can be deceptive. Creditors rely on the credit bureaus for an accurate and complete record
of a consumer’s credit history to better assess a persons credit risk.
Understanding this, if complete deletion cannot be achieved, your aim should be for the
creditor to notify the credit bureau to mark the file as ‘Paid as agreed or ‘Paid with zero
balance’.
Negotiating a settlement with a creditor can be frustrating. Don’t lose sight of the fact that
you have something that the creditor wants (money) and they have something you want (a
better credit report). Finding a comfortable medium is the goal.
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