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Best Way to Negotiate with Collectors


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Hello All,

I am new to this forum and could use some help.


After a stretch of unemployment and wife's medical issues, i have fallen behind on my CC payments.  This all started 2 years ago and i have yet to pay one bill since.  I would like to start the process of at least negotiating.  I have received collection letters of up to 70% off some balances.  


Here are my questions:


Is it possible to deal with only one agency during the process or do i have to work with all of them?

Should i call the credit card company directly and ask if they can offer the same or did they already charge-off?


Like i said, this is new to me, so any help is appreciated.


Of course, the easy way out and the cheapest route is BK, which i really dont want to do.


Thanks in advance.

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This is a multi-prong process but a few rules first:

  1. IF a collector's lips and tongue are moving, they are lying
  2. DO NOT give any collector access to your checking account or anything with your checking account number and bank. When you make payments, send a cashiers check or money order in the mail. Let them know this is the only way they will get their money
  3. IF it is not in writing, it did not happen. Do not make any payments until you have it in writing.
  4. When you make a payment, take the payment receipt and letter, attach them, and then put it somewhere you can get to it and keep for the rest of your life. They will come back for more.
  5. Call/talk to one collector at a time. If you call all of them at once, you will have a zoo on your hands. These people are sharks and money is like blood to them.

With that said, here is what you do to negotiate:


Letter sent within 30 days or the time frame with settlement terms you agree to:


In this case, just send the money order within the time frame, staple the receipt to the letter and be done. You have settled that debt.

Letter with settlement terms that is old but you agree to:


Contact the collection company and see if the offer still stands. If it does, request the offer in writing and then once you get that, send the money order and staple the receipt to the letter.

If the collector says the offer does not stand or will not send a letter with the settlement terms, start the negotiation process below.


No settlement terms or you cannot agree to the current settlement terms:


First determine the maximum amount you want the settlement to be (usually what you can afford) and then go about 2 - 3 steps below that as your first off. They might accept that, you never know until you ask.

Once you have the amounts you can pay, start with the smallest debt and call that collector. Let them get through their talk and then make your offer. They will either accept your offer or refuse. If they refuse, ask them for a counter offer. Do not stay on the phone with them for more than 5 minutes as they will try to use emotion to get more money out of you. If you cannot come to an agreement, end the call graciously and inform them that you will call back another time and that they are not to call you.

As part of the negotiation, you can tell them that you have other debts and that there is a time limit on your deal and once the time runs out, you will make the offer to the next debt and they go to the bottom of the pile and wait. This will also work if they start to get rude and belligerent. Do not take any abuse, after all, it is them wanting your money.

If they accept the deal, request that they send it to you in writing and no access to your checking account. You can give them your address (or get a PO Box) to send the settlement letter to but that is the extent of the information you should be willing to give. Anything else is off the table. Once you get the letter, send the payment and attach receipt and letter and be done.

If they keep refusing or get rude, again, graciously hang up saying that it is obvious we cannot deal today so I will call back tomorrow (or whatever time frame you wish) and see if I can get someone who is more willing to deal. Do not accept any calls if they call you other than to tell them that you will call at your leisure. Put that in your voice mail.

After a set amount of time, move on to the next collector and inform the current one that they have moved to the bottom of the pile. Do the same if they get rude and threatening.

If they threaten to file a suit, simply say "Good, I can then talk to someone with more than one functioning brain cell who will probably accept this deal." and then end the call.

Realize that these collectors are 100s of miles away from you and these are people who could not get jobs in better professions such as sewer system cleaner, waiter, store clerk, garbage man, etc. Many have criminal records or bad job histories. Usually the deal will be made with someone who is either green and trying to get their numbers up to get out of probation or someone whom your payment will get them their monthly bonus.

As a final statement, there are those who will say that you should not pay a collector. That is fine and if that is how the feel, it is up to them. My response is that each person has to decide what is best for them and if you decide to pay the collectors, that is up to you.

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I think Whocares covered this well, but I will add a few things:


1) never pay them over the phone or with a check. I would use a money order or cashiers check regardless of any inconvenience.


2) They do their best negotiation (and sometimes only) AFTER they have filed a lawsuit.


3) If it is a collection company with a lawyer in house (like CACH) speak to the LAWYER only.

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