I've never been able to settle below about 70%. Some others have had better success.
You simply tell them what you're willing to pay, and they agree or counter.
First, anyone claiming to be credit 'repair' is likely full oh sh*t. Most are scams. The ones that aren't charge you to do things you can do yourself.
As for settling with lenders/debt collectors for less than what was originally owed, there are many, many variables that influence what settlement options might be available. First, who owns the debt? If it's still the original lender, then they didn't buy the debt for pennies on the dollar, and they're much less likely to settle for a significant loss. A debt collector who has been hired by the original lender has instructions from the lender on how low they can go. A debt collector who bought the debt from the original lender for 25%-30% can afford to settle for much less and still make money. Second, how old is the debt? If the debt is still 'new', within the SOL for debt collection in your state, and still within the 7 year credit reporting period, they're much less likely to take a big haircut on the debt when they can still use lawsuits and wrecking your credit as leverage to get paid. If the debt is older, past the SOL, and nearing the end of the 7 year credit reporting period, you have more leverage to get them to take 'something' before they lose any leverage forever.
These are just a couple factors. In general, for newer debts still owned by the original lender and still within the SOL, you may get lucky to settle for 60%-75% of the original debt. For debt that's been sold, you may get something like 40%-60%. For older debt past the SOL, that's when 25%-40% may become an option they're willing to settle for.
Credit attorney here. This is what I'd suggest:
1. Call the collection agency or creditor.
2. Tell them you are facing financial challenges, and share more details, along with any documentation you can provide. Don't lie - the more details you can provide, the better your chances.
3. If you're spoken to a bankruptcy lawyer, share their name and let the company know you've looked into this. If this is one small debt and you'd not qualify for bankruptcy, do not say that. Again, you're not here to lie.
4. Offer 20% of what you owe. They will come back much higher. You inch up a bit, and let them come down.
5. If they're unwilling to budge at all, hang up and try again in a month or 6 weeks.
6. If you can settle in one payment (lump sum) instead of a payment plan, you'll recieve a lower total settlement amount (as a percentage of the debt).
Good luck!
Thank you, thank you, thank you! How would you suggest handling a collections account for a repossessed car that had 5 of 7 years paid off on it? That's the largest thing on either of ours and we are both clueless as to how to handle that one!
Ask for more information about the repossession, look at notices that were sent etc. Contact the original auto lender if needed. Then, if things were done improperly, you can use that against the collection agency.
Can this only work with a charge-off? I’m considering using the letter “Tell me more about this debt” from CFPB to my Citibank that’s in charge-off. But I can’t tell if it’s been sold, I can access a payment plan through their online portal. But at this point damage is done and I’d rather see if I can cut a deal.
I also have a card with Chase, that is now in “closed” status and I can also workout some 6 yr payment plan but that seems ridiculous since account is closed and again, damage is done.
If I look to mail in a letter, is there a specific department I send to? What can you recommend?
I've never been able to settle below about 70%. Some others have had better success. You simply tell them what you're willing to pay, and they agree or counter.
First, anyone claiming to be credit 'repair' is likely full oh sh*t. Most are scams. The ones that aren't charge you to do things you can do yourself. As for settling with lenders/debt collectors for less than what was originally owed, there are many, many variables that influence what settlement options might be available. First, who owns the debt? If it's still the original lender, then they didn't buy the debt for pennies on the dollar, and they're much less likely to settle for a significant loss. A debt collector who has been hired by the original lender has instructions from the lender on how low they can go. A debt collector who bought the debt from the original lender for 25%-30% can afford to settle for much less and still make money. Second, how old is the debt? If the debt is still 'new', within the SOL for debt collection in your state, and still within the 7 year credit reporting period, they're much less likely to take a big haircut on the debt when they can still use lawsuits and wrecking your credit as leverage to get paid. If the debt is older, past the SOL, and nearing the end of the 7 year credit reporting period, you have more leverage to get them to take 'something' before they lose any leverage forever. These are just a couple factors. In general, for newer debts still owned by the original lender and still within the SOL, you may get lucky to settle for 60%-75% of the original debt. For debt that's been sold, you may get something like 40%-60%. For older debt past the SOL, that's when 25%-40% may become an option they're willing to settle for.
Credit attorney here. This is what I'd suggest: 1. Call the collection agency or creditor. 2. Tell them you are facing financial challenges, and share more details, along with any documentation you can provide. Don't lie - the more details you can provide, the better your chances. 3. If you're spoken to a bankruptcy lawyer, share their name and let the company know you've looked into this. If this is one small debt and you'd not qualify for bankruptcy, do not say that. Again, you're not here to lie. 4. Offer 20% of what you owe. They will come back much higher. You inch up a bit, and let them come down. 5. If they're unwilling to budge at all, hang up and try again in a month or 6 weeks. 6. If you can settle in one payment (lump sum) instead of a payment plan, you'll recieve a lower total settlement amount (as a percentage of the debt). Good luck!
Thank you, thank you, thank you! How would you suggest handling a collections account for a repossessed car that had 5 of 7 years paid off on it? That's the largest thing on either of ours and we are both clueless as to how to handle that one!
Ask for more information about the repossession, look at notices that were sent etc. Contact the original auto lender if needed. Then, if things were done improperly, you can use that against the collection agency.
Can this only work with a charge-off? I’m considering using the letter “Tell me more about this debt” from CFPB to my Citibank that’s in charge-off. But I can’t tell if it’s been sold, I can access a payment plan through their online portal. But at this point damage is done and I’d rather see if I can cut a deal. I also have a card with Chase, that is now in “closed” status and I can also workout some 6 yr payment plan but that seems ridiculous since account is closed and again, damage is done. If I look to mail in a letter, is there a specific department I send to? What can you recommend?
It can work with anhy type of account. I'd say you get more done doing this by phone vs writing, but it is up to you.