How to Pay Less on a Collection Agency Notice

Creditors typically have more difficulty collecting old debts than recovering recently defaulted accounts. Most creditors, such as bank and credit card companies, consider a debt uncollectible after 180 days and send the account to a collection agency to recoup a reduced amount. Because collection agencies purchase debts for less than their total value, a collector can offer you a settlement and still make a profit on the account. You do not need to accept the first settlement offer the collection agency proposes. Instead, negotiate with the company for the lowest settlement balance possible.

Instructions

1

Examine your finances. Determine how much you can comfortably afford to pay the collection agency in a settlement before initiating negotiations.

2

Call the collection agency. Ask to speak with a supervisor or someone with the permission to negotiate a settlement. While some collection agencies grant this ability to all debt collection agents, others only permit supervisors to negotiate settlements with consumers.

3

Inform the debt collector that you cannot pay off the collection account in full, but would consider a settlement. Quote the agent a price lower than that which you can afford to pay. You're more likely to pay less by negotiating up from what you want to pay than negotiating down from what the collector wants you to pay.

4

Implement any negotiation tools at your disposal. For example, if the debt you owe is particularly old and your state's statute of limitations for lawsuits has already passed, you may point out to the collector that the company has no other collection options should it not accept your settlement.

5

Request that the collector send you the details of the agreement in writing and signed by a company representative once you reach a compromise. Without a written agreement, you possess no proof that the company offered you a settlement and you were not merely making a payment. Without a written agreement, unethical collectors can then continue pursuing you for the unpaid balance.

6

Send payment to the collection agency via a money order. This ensures that the collection agency receives payment without granting the company direct access to your bank account.