How to Make a Settlement With a Collection Agency
Validate the debt collection agency claims., Check the statute of limitations., Know the method of payment., Know how much money to pay., Negotiate a settlement with the debt collection agency., You should write an offer of acceptance or request a...
Step-by-Step Guide
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Step 1: Validate the debt collection agency claims.
You should send the debt collection agency a letter requesting that it send you proof you owe the debt. -
Step 2: Check the statute of limitations.
Each state has a statute of limitations on how long a creditor has to collect on a debt.
For example, debts from 10 years ago may be considered zombie debts-or debts too old to collect on.
You won't have to settle the debt if the collection agency tries to collect on a zombie debt. , You have 2 options.
You can make a settlement offer in installments.
Paying in installments requires you to make more than 2 payments to the debt collection agency.
You can pay in a lump sum.
A lump sum payment requires you to make 1 payment. , You should save money before settling any debt with a collection agency.
You want to have enough money to negotiate a settlement. , You can negotiate in 2 ways.
A debt collection agency may contact you with a settlement offer.
You can contact the debt collection agency in writing and offer a settlement figure.
Generally, you should start the negotiation by offering approximately 25 percent of the debt.
You can make a counter offer if the agency's settlement offer is too high or it rejects your offer.
The counter offer is an alternative offer.
You may have to go through the negotiation process several times.
Accept the terms of the agreement in writing. ,, You should send the payment by certified mail so you have confirmation that it receives the money. -
Step 3: Know the method of payment.
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Step 4: Know how much money to pay.
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Step 5: Negotiate a settlement with the debt collection agency.
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Step 6: You should write an offer of acceptance or request a letter from the agency if it accepts your offer.
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Step 7: Send the payment along with a letter to the debt collection agency.
Detailed Guide
You should send the debt collection agency a letter requesting that it send you proof you owe the debt.
Each state has a statute of limitations on how long a creditor has to collect on a debt.
For example, debts from 10 years ago may be considered zombie debts-or debts too old to collect on.
You won't have to settle the debt if the collection agency tries to collect on a zombie debt. , You have 2 options.
You can make a settlement offer in installments.
Paying in installments requires you to make more than 2 payments to the debt collection agency.
You can pay in a lump sum.
A lump sum payment requires you to make 1 payment. , You should save money before settling any debt with a collection agency.
You want to have enough money to negotiate a settlement. , You can negotiate in 2 ways.
A debt collection agency may contact you with a settlement offer.
You can contact the debt collection agency in writing and offer a settlement figure.
Generally, you should start the negotiation by offering approximately 25 percent of the debt.
You can make a counter offer if the agency's settlement offer is too high or it rejects your offer.
The counter offer is an alternative offer.
You may have to go through the negotiation process several times.
Accept the terms of the agreement in writing. ,, You should send the payment by certified mail so you have confirmation that it receives the money.
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Susan White
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