How to Set Up a Payment Plan With Collection Agencies

Collection agencies do not simply threaten consumers; they may also work with a consumer to arrange a payment plan for a past-due amount. Creditors, after a certain point, hire collection agencies to attempt to collect money owed. Collection agencies charge creditors a fee which is typically a portion of the collected money. Setting up a payment plan with a collection agency begins with a person reviewing all debts he owes. This helps determine, in advance, how much of a payment he can afford.

Instructions

1

Determine a lump sum that is affordable, as well as a monthly payment. Review all debts and income to have a clear understanding of what amount of payment will work for you. If you enter into a payment plan that you cannot afford, you will likely default again on payment.

2

Call the collection agency with your play for repayment. It is important to call the agency, or to answer its calls, to minimize the damage to your credit rating.

3

Make an offer for a reasonable one-time lump sum amount. The agency may counter offer, so make the offer at a lower amount than what you actually can afford or want to pay.

4

Suggest a monthly payment plan, if the agency does not agree to the lump sum. Explain to the agency the amount you can afford. The agency may counter your offer, so begin with a lower amount than what you can afford.

5

Confirm the details of the arrangement. Ask the creditor when the payments will be due and if interest will be charged and at what rate. Find out the length of the payment plan and the date the debt is calculated to be paid off. The agency will likely issue a monthly statement.

6

Request the terms in writing. Ask the agency to provide you with a written set of the terms. Review the terms to ensure their accuracy.