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Settle your Debts with Original Creditors, Save Money
and Repair your Credit
by Lisa Phillips
and Repair your Credit
by Lisa Phillips
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.
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.
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.
Can’t pay your bills anymore? Get 100% online debt relief with CareOneSM Debt
Consolidation.
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.
Can’t pay your bills anymore? Get 100% online debt relief with CareOneSM Debt
Consolidation.
Related Topics:
The best way to find out if your account is still with the
original creditor is to simply give them a call. The credit
card company will let you know if they have forwarded
your account to a collection agency. If the original
creditor still has the debt, they will more than likely be
very happy to deal with you. However, you may not get a
huge savings as you would with a collection agency.
original creditor is to simply give them a call. The credit
card company will let you know if they have forwarded
your account to a collection agency. If the original
creditor still has the debt, they will more than likely be
very happy to deal with you. However, you may not get a
huge savings as you would with a collection agency.
Original creditors can be less flexible when it comes to debt settlement. However you do not have
to be the best negotiator to settle your debts because you have the best leverage, the money
the creditors want. Start your negotiations low, get everything in writing and follow these tips
below:
1. Wait to settle your account when it is at least 60 to 90 days in arrears.
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 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. Do not stop paying your other bills in an attempt to convince your creditor to settle.
to be the best negotiator to settle your debts because you have the best leverage, the money
the creditors want. Start your negotiations low, get everything in writing and follow these tips
below:
1. Wait to settle your account when it is at least 60 to 90 days in arrears.
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 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. Do not stop paying your other bills in an attempt to convince your creditor to settle.
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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
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