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Settle your debts with Original Creditors,
save money and repair your credit
by Lisa Phillips
save money and repair your credit
by Lisa Phillips
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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.
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.
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.
Can’t pay your bills anymore? Get 100% online debt relief with CareOneSM Debt Consolidation.
(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.
Can’t pay your bills anymore? Get 100% online debt relief with CareOneSM Debt Consolidation.
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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.
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.
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 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. Do not stop paying
your other bills in an attempt to convince your creditor to settle.
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 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. Do not stop paying
your other bills in an attempt to convince your creditor to settle.
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. Be cool and confident, get everything in writing and
start your settlement negotiations low and follow these tips below:
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. Be cool and confident, get everything in writing and
start your settlement negotiations low and follow these tips below:
