How to Make a Settlement With a Debt Collector

When debt collectors call on what seems like an hourly basis, you may find it hard to think about taking control of your financial future --- but you can. You don't need a debt settlement company or an attorney to make a settlement with a debt collector. With cash in hand and persistence, you may negotiate your own settlement for less than the full balance due and begin rebuilding your credit health.

Instructions

1

Avoid the guilt game. Write a letter to the debt collector offering to settle the debt for less than the full amount. Explain why you feel settling is in everyone's best interest, and what sort of hardship you may be experiencing that led to you falling delinquent. Begin negotiations with 20 percent to 30 percent of the balance due. Make sure you have that amount available in case the company accepts your offer.

2

Expect the collector to come back with a counteroffer. Request all offers in writing. Make a counteroffer in writing that's no more than your available cash.

3

Anticipate the debt will be settled at 50 percent to 65 percent of the balance due, per DebtorsUnite.com. Don't pay the agreed-upon price until you have an agreement signed by a collection representative.

4

Send in cash in the form of a money order or cashier's check within the agreed-upon time frame.

5

Ask the collector to report the debt to the credit bureaus as "paid in full" as part of the settlement agreement.

6

Keep a copy of all correspondence and get a new credit report to ensure the debt collector followed through with reporting the settlement as agreed.