How Can I Get a Collection Agency to Settlement?

Utilizing the proper negotiation skills, you can save yourself hundreds if not thousands of dollars by settling with a collection agency. Collection agencies purchase your debt at a discounted rate from the original creditor. Information empowers you to properly negotiate and settle any collection account you have.

Obtain Credit Report

Obtain a copy of your credit report. You can order your credit report by going to Equifax.com, Experian.com or TransUnion.com. You can also update your credit report by contacting the credit bureaus directly over the phone or sending them a letter with a copy of your identification and security card requesting your credit report. You are entitled to a credit report from each bureau once per year or if you are denied credit for any reason.

Determine if the collection agency is on your credit report. If the collection agency is on your credit report, you may be able to negotiate having the debt removed. Research any inaccuracies in the way they placed the information or your credit report. If there is any information that is incorrect you have more room to negotiate a settlement. The Fair Debt Collection Practices Act, which is backed by the Federal Trade Commission, has laws in place to make sure collection agencies are reporting accurate information on your credit report.

Analyze Debt

Determine how much of the debt you are willing and able to pay. You are not required to pay the full amount. Factor in your budget, available funds and monthly expenses in figuring how much you can pay the collection agency. Contact the agency via certified mail with your repayment terms. Be sure to inform the agency of the dates you will start repaying the amounts, and how you expect to have the debt cleared once it is fully repaid. For example, you can negotiate to have the collection account completely removed from your credit report. Give the collection agency 10 to 14 days to respond to your inquiry.

Agreeing on Settlement

Wait until you receive correspondence from the collection agency. If the agency does not respond within the allotted time you gave, you can submit this information to your credit bureau via certified mail. The collection agent will eithercontact you via mail or phone informing you if it accepts the terms or not. You can continue to negotiate over the phone or you can negotiate by mail. Make sure any agreement is written and signed by both parties.

Tips

You can also hire a certified public accountant to send a letter or your behalf informing the collection agency of your financial ability to repay the debt. Use this method only if you have limited to no funds to repay the debt. Collection agencies may reduce the debt greatly if your accountant verifies you have no means to repay.