How to Negotiate a Payment Plan With a Debt Collector

Debt collectors use many unlawful tactics to secure a payment from debtors. Some include threats of lawsuits as well as verbal insults. No matter how many threats and insults the debt collector hurls at you, understand that you have the power to negotiate. Don't be persuaded by what the debt collector tells you will work for his company. Instead, persuade the debt collector by telling him what works for you.

Instructions

1

Avoid making a payment arrangement until you are certain that the debt belongs to you. If you agree to make a payment arrangement, it is equivalent to assuming responsibility for the debt.

2

Check the "date of last activity" on the account before negotiating a payment plan. First request a copy of your credit report. You can get a free credit report each year through the Annual Credit Report website. You can also order a paid copy of your report from each credit bureau, Experian, Equifax and TransUnion.

3

Avoid making a payment plan if the debt is approaching your state's statute of limitations. In many states, an inactive delinquent account can remain on your credit report for seven years. After seven years, the debt has to be removed. If you agree to a payment plan, the date of last activity is reset. This voids the current statute of limitations on the debt.

4

Advise the debt collector of the amount you can comfortably afford to pay each month. The debt collector will likely pressure you to pay more. However, it's better to make a payment plan that you can honor than one you can't keep.

5

Ask the debt collector for a lower payoff amount if you pay the balance owed in full. Many debt collectors will significantly reduce the amount you owe if you agree to make one lump-sum payment.

6

Request that the debt collector report your payment to the credit bureaus. This shows potential creditors that the debt is paid in full.

7

Request everything in writing. This includes the payment plan, lump-sum settlement amount and the agreement to report your payment to the credit bureau.