Most debts are transferred to a collection agency, and most are unsecured debts like utility, credit cards, medical debt, cellphones, etc. While most creditors are known for their rude behavior and rigid nature, some are flexible. If you are lucky enough, your debt might be handled by one such collection agency, and you can ask them for settlements.
Debt settlements are negotiations between the debt owner and creditor to settle for less than the actual debt. However, if you want to know more about you can reduce your debt, you must contact Zero Debt Law Firm and schedule an appointment with a debt collection attorney today!
Let us discover your potential options for debt.
Offer a handsome amount.
The best way to negotiate with creditors is to offer them a large chunk of your debt. However, depending on your collection agency, the percentage can vary. For example, some creditors ask for 70%-80 off your debt, other agencies might accept 50%, and if you are fortunate, you might get out of it by paying one-third of the total amount.
Offering debt collection agency’s a bulk amount generally does the trick as the creditor will also get more incentive in the settlement. It will make the settlement process much more manageable if you can afford to pay the entire amount in one go.
Let’s say you owe a $1000 debt to the agency, and offer them to pay at least $600 immediately to peacefully settle the matter. The amount you pay will be further divided depending on who possesses your debt. If your debt is still with your original creditor, the agency will keep it cut and transfer the rest to them. However, if the collector pet ally owns your debt, the entire amount goes to time.
Ask them to improve your credit report.
While negotiating with the creditor, you can also take the opportunity to undo any damage to your credit report. A missed installment or debt can show on your credit report, which can cause a negative impact.
Credit reports come under three bureaus, i.e., TransUnion, Experian, and Equifax. They produce most credit reports, and you must know which bureau made your credit report. Once you know, you can request the creditor to help you remove all the negative remarks about your debt from the credit report.
Although there is no guarantee that the collector will agree to your terms and conditions, it is always worth trying.