How to Negotiate a Written-Off Debt Balance

When you have not paid a creditor within a designated period of time and have not made arrangements to pay the debt down, the balance may be written off, or "charged off." This means the creditor no longer sees you as someone able or willing to pay the debt. Once a debt is charged off, the creditor writes it off as a loss but may turn the amount over to a third-party debt collector. You still owe the debt, but it is no longer on the active books for the creditor.

Instructions

1

Set aside money to pay the debt off. Keep this money out of accounts that collectors may be able to put liens on or find through credit reports.

2

Call the creditor or the third-party collector. The name and contact information should be on any correspondence you have received from the companies.

3

Provide the collector with the account number or reference number provided on any correspondence. Get the name of the person and the department you are speaking with.

4

Be polite and friendly. Collectors are accustomed to dealing with people who are angry, afraid and rude. It is their job to protect the interests of the creditor, but they will be much more willing to negotiate with you if you are polite.

5

Ask what the current balance of your debt is. Get specific numbers for the principal, penalties and interest.

6

Offer to pay a percentage of the balance in a payment plan over three months. Depending on how long the debt has been outstanding, collectors expect the collectability of the debt amount to go down. You may be able to get the debt reduced as much as 70 percent. According to SmartCreditInfo, debt-management programs offer collectors 3 percent monthly payments.

7

Inquire what the representative can do if you can pay a lump-sum payment. Penalties, interest and a substantial part of your principal may be waived if you are able to make a lump-sum payment.

8

Keep meticulous notes about the agreement made, whom you were speaking with and on what date the conversation occurred.

9

Send all payments as a money order through certified mail. This allows you to prove you have made the payment based on the agreement.