Negotiate Settlements for the Best Possible Outcome
Creditors will not consider a settlement for less than the balance in full without good reason.
Therefore, it will be up to you to give them a good reason to settle your debt for less.
Collection agencies, on the other hand, may not need much reason to accept a settlement
offer and therefore may be more receptive in authorizing a debt settlement for a reduced
amount.
In either case, it is very important to be very specific as to what you, the consumer, will be
getting in return for your settlement money.
Your ultimate and most favorable outcome is to get an outright deletion of the negative
mark on your credit report.
Therefore, it will be up to you to give them a good reason to settle your debt for less.
Collection agencies, on the other hand, may not need much reason to accept a settlement
offer and therefore may be more receptive in authorizing a debt settlement for a reduced
amount.
In either case, it is very important to be very specific as to what you, the consumer, will be
getting in return for your settlement money.
Your ultimate and most favorable outcome is to get an outright deletion of the negative
mark on your credit report.
If this is not agreeable, then your
secondary goal will be to have your
account reported as 'Paid in Full'
status.
If the creditor or collection agency
does not agree with either, then a
third option would be to report the
account as ‘Account Settled in Full’
with a zero balance. This would give
you an acceptable outcome.
In most instances, a settlement for
less than the balance in full will be
accepted under the condition that
you send the entire settlement
amount at once. Therefore, DO NOT
BEGIN the settlement process if you
secondary goal will be to have your
account reported as 'Paid in Full'
status.
If the creditor or collection agency
does not agree with either, then a
third option would be to report the
account as ‘Account Settled in Full’
with a zero balance. This would give
you an acceptable outcome.
In most instances, a settlement for
less than the balance in full will be
accepted under the condition that
you send the entire settlement
amount at once. Therefore, DO NOT
BEGIN the settlement process if you
Debt Solutions to help you improve your credit score!
Debt Credit Learning Center
do not have the money to cover the total settlement offer.
There are times that the creditor may agree for you to send payments towards the
settlement amount, however, the creditor may only allow up to only three equal monthly
payments.
Do not agree to send in any money without having the terms of the settlement agreement
in writing and signed by an authorized manager of the collection agency or original creditor.
Negotiating a settlement may not always be the easiest thing to do.
Do not be intimidated, stay in control and be assertive with your settlement demands.
Do not be adversarial.
Remember, you legally owe a just and valid debt. The creditor is under no obligation to
accept anything less than the balance in full.
Your goal in the settlement process should be to negotiate for the lowest possible debt pay
off and for the most positive outcome for your credit report.
Before making an offer to settle your debt, you can suggest that all interest and late fees be
deleted from the total debt amount. This may significantly reduce the total outstanding
balance.
Whether or not they agree to delete interest or fees, a good place to start with your
settlement offer is 25% percent of the total balance due. For example, if $1000 is the
total balance due, then $250 should be your starting point. ( $1000 X 25%=$250 )
The creditor or collection agency will either outright decline the offer you make or may just
accept it, especially if the account is many months or many years past due. More than likely,
they will make a counter offer based on their criteria.
Strongly consider any counter-offer from the creditor. If it is fair and equitable, take it and be
done with it.
Remember to explain how dire and bleak your current situation is. It is important that you
express clearly to the customer service representative that accepting your settlement offer
is the best possible outcome for everyone concerned and that you greatly appreciate any
assistance they can give you to bring your debt to conclusion.
The settlement process is sometimes a one-two punch. Other times it will take weeks and
even months with letters and phone calls going back and forth.
Whenever you and the creditor agree to a settlement number, do not send them any
money until you have received the details of the settlement in writing.
Be patient with the settlement process and be consistent with your follow-up.
There are times that the creditor may agree for you to send payments towards the
settlement amount, however, the creditor may only allow up to only three equal monthly
payments.
Do not agree to send in any money without having the terms of the settlement agreement
in writing and signed by an authorized manager of the collection agency or original creditor.
Negotiating a settlement may not always be the easiest thing to do.
Do not be intimidated, stay in control and be assertive with your settlement demands.
Do not be adversarial.
Remember, you legally owe a just and valid debt. The creditor is under no obligation to
accept anything less than the balance in full.
Your goal in the settlement process should be to negotiate for the lowest possible debt pay
off and for the most positive outcome for your credit report.
Before making an offer to settle your debt, you can suggest that all interest and late fees be
deleted from the total debt amount. This may significantly reduce the total outstanding
balance.
Whether or not they agree to delete interest or fees, a good place to start with your
settlement offer is 25% percent of the total balance due. For example, if $1000 is the
total balance due, then $250 should be your starting point. ( $1000 X 25%=$250 )
The creditor or collection agency will either outright decline the offer you make or may just
accept it, especially if the account is many months or many years past due. More than likely,
they will make a counter offer based on their criteria.
Strongly consider any counter-offer from the creditor. If it is fair and equitable, take it and be
done with it.
Remember to explain how dire and bleak your current situation is. It is important that you
express clearly to the customer service representative that accepting your settlement offer
is the best possible outcome for everyone concerned and that you greatly appreciate any
assistance they can give you to bring your debt to conclusion.
The settlement process is sometimes a one-two punch. Other times it will take weeks and
even months with letters and phone calls going back and forth.
Whenever you and the creditor agree to a settlement number, do not send them any
money until you have received the details of the settlement in writing.
Be patient with the settlement process and be consistent with your follow-up.