Hardship Recovery

How To Negotiate With Debt Collectors For Better Terms

As much as you may dislike their existence, you can work with debt collectors to get better debt repayment terms. Here are some negotiation tips you can put to use now.


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You may get angry whenever you see a call or letter from a debt collector. They’re not contacting you out of any personal enjoyment they get from harassing people, however. Instead, they’re calling to resolve a debt that’s past due.

If you get a quick debt collector call because you simply forgot to make a payment, cutting a check will suffice at getting them off your back. If the past due debt is substantial and you’re extremely late, though, you may have to put your negotiation skills to work.

Your best move when it comes to collectors is to work with them to make your debt more manageable. The tips in the following list will help you not only work with them when they contact you, but also get more optimal repayment terms or stop any harassment.

1. Verify the debt.

There’s no need to negotiate if the debt isn’t even yours. Confirm that it’s yours by first asking the collector for the company’s name, their name, the phone number, and business address.

Take this step even further by getting them to send you a validation letter. They must do so within five days of contacting you. The letter must list the creditor’s name, how much you owe, and steps to take if there’s been an error.

You can get even more information on the debt by sending a verification letter within 30 days of receiving the validation letter.

Should the collection agency balk at any of the above requests, you’re probably dealing with a scammer.

2. Know your rights.

You should enter the debt negotiation process as prepared as possible. Know your rights as outlined in the Fair Debt Collection Practices Act, or FDCPA.

In short, a collector cannot use profane language, harass you, threaten to arrest or deport you, or call before 8 am or after 9 pm.

Take notes of every call, including the date, time, and collector’s name for your records. Should they violate any laws, you can report them or even sue them.


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If you want to avoid further contact for some reason and don’t wish to negotiate, write a stop contact or cease letter through certified mail. It will stop the collector from contacting you outside of saying they’ll cease contact or have plans to sue you.

3. Propose a lump sum payment.

You can settle the debt for pennies on the dollar if you offer a lump sum. This is a good option if you have some cash sitting around but not enough to pay the entire debt.

Regardless of the new payment arrangement you propose, make sure you can fulfill it. The new agreement can lead to even more issues if you fail to pay up.

4. Hint at bankruptcy.

A collector knows that bankruptcy can erase unsecured debts not tied to assets. If you mention bankruptcy, they may try extra hard to negotiate now.

5. Keep an eye on the statute of limitations.

Depending on where you live, the statute of limitations on when a debt can be collected could pass. If you make even one small payment on it, the payment clock could restart.

In short, don’t negotiate old debts whose time is about to run out. Once the statute of limitations hits, collectors won’t be able to sue you.

6. Consider your credit report.

Even if you pay less than the full amount, tell the collector you want all negative information related to the debt removed from your credit report. Tell them to list it as paid in full as well.

If they agree, get it in writing, along with all terms of the newly negotiated repayment. Never accept a verbal promise.

Once you have everything in writing, you can then proceed to pay according to the new terms.

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