How to Negotiate Credit Card Debt with Collection Agencies

Negotiating unpaid debt with a collection agency can be a challenge. The primary goal of any debt collector is to recover as much of the outstanding balance as possible. Still, many collection agencies will work with debtors to negotiate a settlement for less than the full amount owed. To successfully negotiate credit card debt, you need to have a realistic goal in mind as well as a clear understanding of your rights.

Instructions

1

Determine how much money you can afford to pay the collection agency before making contact. The amount that a debt collector will be willing to accept usually depends on the total balance and the age of the account. You should never offer more than you can reasonably afford to pay since most debt collectors will want you to make one large lump sum payment or several smaller payments spread out over a short period of time.

2

Contact the collection agency and tell them you want to propose an offer for settlement of your credit card debt. If the person you speak with is resistant or rude, politely but firmly ask to speak to a supervisor. If you're not comfortable talking directly to a collection agent, send them a certified letter detailing the terms of your offer.

3

Make your initial offer to the collection agency detailing how much of your credit card debt you can afford to pay, and when. Give the debt collector specific reasons as to why accepting a settlement would be beneficial to him. Be prepared to make a counter-offer if the debt collector resists your initial offer, but don't let him pressure you into paying more than you're comfortable with.

4

Insist that the collection agency report your account as "Paid as Agreed" or "Paid in Full" when you pay it off, rather than "Settled." Having the debt reported as paid rather than settled is less damaging to your credit score and can help offset some of the negative impact of any prior delinquencies on the account.

5

Get the terms of the settlement agreement in writing before you submit any payment to the collection agency. Read over the agreement carefully to ensure that the details of the settlement are the same as what you discussed over the phone. Once you've verified the terms of the settlement, you can send payment via certified check or money order.