Tips for Negotiating with a Debt Collection Agency

negotiating a debt with a collection agency

Tips for Negotiating with a Debt Collection Agency

Dealing with calls from a debt collector is never fun. When debt collectors start calling, you need to have a plan for dealing with them. If paying in full is not an option for you, you may want to consider negotiating your debt with the collection agency to see if you can get better repayment terms. If you want to reduce your debts and stop getting calls from collectors, follow these tips from the experts at Pivotal Wealth. 

How to Negotiate with Debt Collectors

When you’re negotiating with debt collectors, the first thing you should do is get as much information as you can about the debt so you can verify that it does, in fact, belong to you. Debt collections agencies must provide you with the creditor’s name and the amount owed within 5 days of contacting you. Compare this information with your own records to make sure that you owe the debt before you begin negotiations.

Once you verify that the debt in question is actually yours, you need to make a plan for repayment. Your final repayment plan may be different from the expectations of the debt collector if you negotiate. Debt collectors are sometimes willing to accept a portion of your debt as a lump sum if they suspect that’s all you’ll reasonably be able to give them. They would much rather take something over nothing at all.

When creating your plan for repayment, remember to be honest with yourself about how much you can actually pay each month. Never pay more than you can afford. If you miss a payment, the debt collector may automatically ask you to pay in full. 

When negotiating a lump-sum payment or a repayment plan with the debt collector, always speak logically and calmly to get the best results. After you reach an agreement with the debt collector, ask to get the settlement agreement in writing to ensure that nothing changes or catches you off guard. 

Seven Steps for Negotiating a Debt with a Collection Agency

  1. Verify that the debt they are attempting to collect is your debt.
  2. Understand your rights according to the Fair Debt Collection Practices Act.
  3. Consider what kind of debt you owe. Certain types of debt, like medical bills, might already have repayment assistance programs in place.
  4. You may be able to negotiate a lump-sum payment instead of a repayment plan in full.
  5. If you need to give the collection agency extra incentive to negotiate with you, mention that you’re considering filing for bankruptcy.
  6. When negotiating with a collection agency, speak calmly and logically. Being rude and mean, or hysterical and unwilling will get you nowhere. 
  7. Always be sure to get the settlement agreement in writing.

Pivotal Wealth Can Help You Deal with Debt Collectors

Should you even pay a debt collector? The experts at Pivotal Wealth can help you decide whether or not this would be a smart financial plan. We can help you improve your credit score and your financial health, and we can also provide education and tools to guide you toward a successful financial future. Let us help you on your journey to becoming debt-free! Contact us today to learn more.

Images‌ ‌used‌ ‌under‌ ‌creative‌ ‌commons‌ ‌license‌ ‌–‌ ‌commercial‌ ‌use‌‌ ‌‌(12/10/2021).‌ Photo by Andrea Piacquadio from Pexels
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Matt Lovelady is a co-founder and managing vice president of Pivotal Wealth. He has launched multiple businesses in the financial services space and is passionate about helping people become debt-free, build their wealth, and plan effectively for their retirement.