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Settle Your Debts with Collection Agencies
by Lisa Phillips
Page 2 of 2
by Lisa Phillips
Page 2 of 2
Secured Debt. Secured debt such as your home or automobile is a lot harder to negotiate a
lesser settlement. The debt is secured by real property and if you cannot make payments the
creditor can simply repossess or foreclose to cover the debt.
Never let the collection agency know where the money is coming from. First, it’s none
of their business, but more importantly, if you mention you are getting a settlement, tax return,
or borrowing money from relatives, they may press you for the entire amount. If you are
negotiating over the phone (why are you negotiating over the phone?) make sure you take
excellent notes and send a confirming letter, certified, return receipt and keep a copy for your
records. The letter should state that the creditor is accepting the lump-sum payment in
settlement of the entire amount you owe.
Do not give a collection agency your bank account or debit card number. Pay off the
settlement with a cashier’s check or a money order, preferably from another bank. Some
banks will not sell you a cashier’s check unless you are an account holder. The U.S. Postal
Service sells money orders. Be sure to keep a copy of the cashier’s check or money order.
Do not disclose your place of business. You do not want a collection agency bugging you
on your job and you definitely do not want a collection agency knowing where you work in case
you are sued. Do not make it easy for them to get a judgment and wage garnishment against
you. It’s not likely that collection agencies will go this far as the costs involved in pursuing a
lawsuit are expensive.
Settle Debts with Original Creditors. Learn to how settle debts for pennies on the dollars
with Original Creditors.
Debt doesn't have to control your life CareOneSM Debt Consolidation can help!
Page: 1 2 Back
lesser settlement. The debt is secured by real property and if you cannot make payments the
creditor can simply repossess or foreclose to cover the debt.
Never let the collection agency know where the money is coming from. First, it’s none
of their business, but more importantly, if you mention you are getting a settlement, tax return,
or borrowing money from relatives, they may press you for the entire amount. If you are
negotiating over the phone (why are you negotiating over the phone?) make sure you take
excellent notes and send a confirming letter, certified, return receipt and keep a copy for your
records. The letter should state that the creditor is accepting the lump-sum payment in
settlement of the entire amount you owe.
Do not give a collection agency your bank account or debit card number. Pay off the
settlement with a cashier’s check or a money order, preferably from another bank. Some
banks will not sell you a cashier’s check unless you are an account holder. The U.S. Postal
Service sells money orders. Be sure to keep a copy of the cashier’s check or money order.
Do not disclose your place of business. You do not want a collection agency bugging you
on your job and you definitely do not want a collection agency knowing where you work in case
you are sued. Do not make it easy for them to get a judgment and wage garnishment against
you. It’s not likely that collection agencies will go this far as the costs involved in pursuing a
lawsuit are expensive.
Settle Debts with Original Creditors. Learn to how settle debts for pennies on the dollars
with Original Creditors.
Debt doesn't have to control your life CareOneSM Debt Consolidation can help!
Page: 1 2 Back
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Get Deletions. Paid collection entries do not improve your credit score. It may even bring it
down. If you can get the debt removed from your credit file in exchange for paying a little more,
do it. Some collection agencies even have a “pay for deletion” fee. The collection agency may
delete their entry entirely but the original creditor may still show negative marks. Negotiate the
negative entries from the original creditor also. At the very least you want the original creditor
to show as “Paid as Agreed,” or “Account Closed/Paid as Agreed” and request any derogatory
remarks taken off your credit report. See Deletions
down. If you can get the debt removed from your credit file in exchange for paying a little more,
do it. Some collection agencies even have a “pay for deletion” fee. The collection agency may
delete their entry entirely but the original creditor may still show negative marks. Negotiate the
negative entries from the original creditor also. At the very least you want the original creditor
to show as “Paid as Agreed,” or “Account Closed/Paid as Agreed” and request any derogatory
remarks taken off your credit report. See Deletions