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You Can Settle Your Debts, Save Money
and Repair Your Credit
by rebuildcreditscores.com
and Repair Your Credit
by rebuildcreditscores.com
Before you begin the process of settling
your debts it is imperative that you find out
who you are dealing with, the original
creditor or a collection agency.
Settling debts with original creditors differs
from settling debts with a collection agency
where you have more leeway to settle for
pennies on the dollar.
You don’t have to be the best negotiator to
settle your debts. You have the best
leverage because you have the money they
want.
Be cool and confident, get everything in
writing and start your settlement
negotiations low.
your debts it is imperative that you find out
who you are dealing with, the original
creditor or a collection agency.
Settling debts with original creditors differs
from settling debts with a collection agency
where you have more leeway to settle for
pennies on the dollar.
You don’t have to be the best negotiator to
settle your debts. You have the best
leverage because you have the money they
want.
Be cool and confident, get everything in
writing and start your settlement
negotiations low.
Tips for Negotiating Settlement with Original Creditor
The best way to find out if your account is still with the original creditor is to give them a call. The
credit card company will let you know if they have forwarded your account to a collection agency. If
not, they will mostly likely be very happy to deal with you but don’t expect a huge savings when
settling a debt with the original creditor. They are not going to be as flexible as a collection agency.
But they will bend. The following are settlement negotiation tips:
1. Do not attempt settlement until your account is at least 60 to 90 days in arrears. The
reason being is that creditors have access to your credit report and they can see how you pay all of
your bills. If you are current on most of your debt and just behind on your debt with them, then they
will be less likely to negotiate a settlement. There is no incentive for them to settle because you are
handling your other debt okay. Now this is not to say stop paying your other bills in an attempt to
convince your credit card company to settle but just don’t attempt settlement too soon.
2. Lump sum payment – start Low on your offers. A good starting point would be fifty percent
(50%) of your total debt if you pay in a lump sum. Fifty percent of the total debt is a fair and
reasonable offer considering you were probably paying way too much in interest anyway. Request to
have penalties and extra interest dropped. Most creditors will do this. You may have to ask for a
supervisor or manager if you are told “no” in response to your offer. Make sure you get a signed
settlement agreement or release when you settle for less than the full amount. The release should
clearly state that the lump sum payment excuses you from any and all remaining balance.
3. Partial repayment over time. If you cannot pay a lump sum, it may be harder to negotiate
settlement for less than the amount owed. The creditor may insist you pay100% of the debt if you pay
over time. If this is the case request any late payments be deleted from your credit reports. You want
to get something out of the deal. Request your credit reports be updated to “paid as agreed” “never
late”.
4. Rehabilitate the debt. If you are past due on a credit card or loan some lenders will allow you to
rehabilitate your account. Rehabilitation is a process by which lenders erase negative marks from
your credit reports once a series of on-time payments have been made consecutively. Usually lenders
require at least 6 to 9 consecutive on-time payments in order for the negative marks to be deleted.
Rehabilitation is not something lenders generally offer, you will have to request it.
5. Stick to your bottom line. If your offer to a creditor is low and the creditor counter-offers
another amount do not split the difference. Some creditors will propose that you split the difference
between a their higher demand and your lower offer, do not agree to it. In this instance, take the “split
the difference” number as the new top number and offer an amount between that and your original
offer.
6. Be patient and determined. In an attempt to settle your debts, creditors may insist that the
number they offer is the lowest possible offer and that it is final. Don’t believe them. You can always
call back at a later time and get someone totally different who is willing to settle for your desired
amount. Remember to always politely ask for a higher authority and be patient.
7. Get your agreements in writing. Original creditors may not want to put negotiations in writing.
Insist on any settlement in writing and get a signed release This is your proof. If you settle for less
than the total amount owed, make sure the creditor signs a release stating that your partial payment
releases you from any remaining balance.
8. Negotiate a favorable credit rating. Request a “deletion” for an account that you settle in full. If
your creditor does not agree to a deletion then request a “paid as agreed" or even “settled" credit
rating. Any one of those ratings would be better than “paid charged off”. Also make sure the creditor
is settling the entire amount of the debt and not charging off the remaining balance. Get it in writing. If
the creditor will not budge on giving you a favorable rating still negotiate a settlement. You can
challenge the listing later directly with the credit bureaus as “paid, never late”. Often you will get a
favorable outcome.
Settle Debts with Collection Agencies. Learn to how settle debts for pennies on the dollars with
Collection Agencies.
The best way to find out if your account is still with the original creditor is to give them a call. The
credit card company will let you know if they have forwarded your account to a collection agency. If
not, they will mostly likely be very happy to deal with you but don’t expect a huge savings when
settling a debt with the original creditor. They are not going to be as flexible as a collection agency.
But they will bend. The following are settlement negotiation tips:
1. Do not attempt settlement until your account is at least 60 to 90 days in arrears. The
reason being is that creditors have access to your credit report and they can see how you pay all of
your bills. If you are current on most of your debt and just behind on your debt with them, then they
will be less likely to negotiate a settlement. There is no incentive for them to settle because you are
handling your other debt okay. Now this is not to say stop paying your other bills in an attempt to
convince your credit card company to settle but just don’t attempt settlement too soon.
2. Lump sum payment – start Low on your offers. A good starting point would be fifty percent
(50%) of your total debt if you pay in a lump sum. Fifty percent of the total debt is a fair and
reasonable offer considering you were probably paying way too much in interest anyway. Request to
have penalties and extra interest dropped. Most creditors will do this. You may have to ask for a
supervisor or manager if you are told “no” in response to your offer. Make sure you get a signed
settlement agreement or release when you settle for less than the full amount. The release should
clearly state that the lump sum payment excuses you from any and all remaining balance.
3. Partial repayment over time. If you cannot pay a lump sum, it may be harder to negotiate
settlement for less than the amount owed. The creditor may insist you pay100% of the debt if you pay
over time. If this is the case request any late payments be deleted from your credit reports. You want
to get something out of the deal. Request your credit reports be updated to “paid as agreed” “never
late”.
4. Rehabilitate the debt. If you are past due on a credit card or loan some lenders will allow you to
rehabilitate your account. Rehabilitation is a process by which lenders erase negative marks from
your credit reports once a series of on-time payments have been made consecutively. Usually lenders
require at least 6 to 9 consecutive on-time payments in order for the negative marks to be deleted.
Rehabilitation is not something lenders generally offer, you will have to request it.
5. Stick to your bottom line. If your offer to a creditor is low and the creditor counter-offers
another amount do not split the difference. Some creditors will propose that you split the difference
between a their higher demand and your lower offer, do not agree to it. In this instance, take the “split
the difference” number as the new top number and offer an amount between that and your original
offer.
6. Be patient and determined. In an attempt to settle your debts, creditors may insist that the
number they offer is the lowest possible offer and that it is final. Don’t believe them. You can always
call back at a later time and get someone totally different who is willing to settle for your desired
amount. Remember to always politely ask for a higher authority and be patient.
7. Get your agreements in writing. Original creditors may not want to put negotiations in writing.
Insist on any settlement in writing and get a signed release This is your proof. If you settle for less
than the total amount owed, make sure the creditor signs a release stating that your partial payment
releases you from any remaining balance.
8. Negotiate a favorable credit rating. Request a “deletion” for an account that you settle in full. If
your creditor does not agree to a deletion then request a “paid as agreed" or even “settled" credit
rating. Any one of those ratings would be better than “paid charged off”. Also make sure the creditor
is settling the entire amount of the debt and not charging off the remaining balance. Get it in writing. If
the creditor will not budge on giving you a favorable rating still negotiate a settlement. You can
challenge the listing later directly with the credit bureaus as “paid, never late”. Often you will get a
favorable outcome.
Settle Debts with Collection Agencies. Learn to how settle debts for pennies on the dollars with
Collection Agencies.
 |  |  |  |  |  |  |  |  |  |
More Resources
Settle Debts with Collection Agencies. Learn to how settle debts for pennies on
the dollars with Collection Agencies.
Disputing information on your credit files Tips for Disputing Negative information
in your credit files.
Debt Validation
How to halt the collection process by requesting a collection agency to validate
your debt.
Get Deletions
Request Deletions when paying a negative account because paid collections do
not change your credit scores.
the dollars with Collection Agencies.
Disputing information on your credit files Tips for Disputing Negative information
in your credit files.
Debt Validation
How to halt the collection process by requesting a collection agency to validate
your debt.
Get Deletions
Request Deletions when paying a negative account because paid collections do
not change your credit scores.
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