Negotiating Debt Settlement Like a Pro

Negotiating with your creditor will not only give you one less thing to worry about, it will also help erase bad marks from your credit report. Settling the debt through negotiations is best for debtors who amassed huge fees and interest on a small debt. Almost all unsecured debt types are negotiable, including credit card debt and medical debts. Below is an outline of the right way to negotiate with either an original creditor or a debt collection company:

Original Creditor

Original creditors may be any of the following:

  • Credit card company
  • Finance agency
  • A store

Active debts will require payment and if you don’t have the means to repay it, you can work out a settlement with the original creditor. Start by determining the exact amount of money you can afford to pay, offer the sum directly to your creditor indicating that by paying said amount, the debt will be considered paid in full and will be reported to credit reporting agencies accordingly. If they agree to the sum you offered, then get everything in writing and sign it together with the representative of the creditor.

On the other hand, if they reject your offer, it’s likely that your account will be turned over to a collection company.

Debt Collection Company

Debt account buying and selling is a billion dollar industry and many collection companies want in on the action. If your account has been sold to a debt collection company, you can present a settlement offer but be warned, debt collection companies are known for their unethical practices so it’s never a good idea to fork over the money without confirming the settlement in writing!

The good news is, if your debt is sold to a collection agency, you can lower down the amount you have to pay by as much as 50% because debt collection companies purchased old, charged off account pennies on the dollar. They are likely to accept a smaller settlement but again, be sure to keep everything in writing and have them sign the agreement and pay them with a bank check or certified check. This way, you protect the information of your actual bank account.

Dealing with credit card debt and settling for a fraction of the original debt is easy as long as you know exactly what to do. Keep the above tips in mind once you get in touch with your creditor or debt collector and you should reach a favorable agreement.

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