How to Settle a Debt With Discover

If you owe a significant amount to Discover, one possible way to resolve your account is to negotiate a settlement for part of the balance owed. Although Discover has a reputation for being unwilling to settle, it might be possible to settle your debt for less than you owe and avoid further collection actions.

Instructions

1

Stop making payments if your account is current. Unless your account is past due, Discover is not likely to discuss a settlement with you unless your account is at least three to four months delinquent. The longer you wait, the better deal you might be able to get.

2

If your account is already significantly past due, take a look at your most recent account statement to determine the outstanding balance. The higher the balance, the more reluctant Discover might be to settle, so determine what percentage of the debt you are willing to pay and can afford. Have at least one counteroffer prepared in case your first offer is rejected.

3

Create a detailed statement of your financial hardship. Discover does offer a hardship payment plan. But if you want to settle, you'll have to demonstrate that you are truly under a financial strain and that accepting your settlement offer is in Discover's best interest.

4

Contact Discover regarding your offer. You can do so via telephone, but it's always best to send a written proposal via registered mail as well. Include the relevant details: your name and account number, the balance owed, the amount you're offering, and your statement of financial affairs. If you've previously had a good history with Discover, point this out as a demonstration of your good-faith effort to pay something toward your debt.

5

If the company accepts your offer, or if you can agree with Discover on a suitable counteroffer, then make arrangement to pay by money order, certified check, or Western Union. Do not give direct access to your bank account. Before you send any payment, have Discover send you the terms of the agreement in writing. Once your payment clears, have it send you written verification that the debt is satisfied.

6

If Discover rejects your offer, threatens you with a lawsuit, or sends your account to another collection agency, then you might need to consider another approach. Discover uses a firm known as Zwicker and Associates for collections, and it is notorious for suing delinquent debtors. Contact a certified credit counselor or bankruptcy attorney to discuss your options.