This method is used to show your creditor that you are willing to work with them to settle the debt for a portion of the total and are trying to convince them to work with you. An effective offer/letter to negotiate your settlement must be professional and direct. Your goal is to show your creditor that you’re interested in settling the debt but that you are unable to pay in full the amount owed. This letter means you’re eager and ready to resolve the situation.
Try to make your letter convincing, avoiding their ability to counter-offer. What you have to understand is they buy these accounts for pennies on the dollar. The firm will write off the account (taking a loss – but they have usually insurance on the account, so they really don’t care…), and sell it to a collection company. If the credit company paid 5%, and get 50%, that’s a helluva return. The collection companies usually split the agent 50/50%, meaning whoever gets the letter gets half the amount you end up paying. But the older the account, the less their odds of getting a settlement, so they sell it to another company to try to get SOMETHING for what they paid. Those pennies on the dollar become less and less as the account changes hands, never forget this. So always act in aggressive when t comes to offers. But be realistic. The company wants to make money, and the agent wants commission, so 20% doubles the investment for the company, and the agent makes some cash. And you save 80%. Sweet deal for all parties.
Providing the amounts/accounts that are owed and to firm(s) you owe to can help your chances. They obviously know this info themselves, but when you include it means you’re on top of the situation and mean business. The older the account, the better your odds of a lower amount. If the account is only 6 months late, then try at 40%. If it’s 3 years old, offer 10% percent. As much as you want to avoid a counteroffer, sometimes you ask for the stars but all you really want is the moon.
If you do settle, then before you actually do, DEMAND the offer/terms in writing via fax, email or letter. Also, try to achieve a ‘pay for delete’ deal. Meaning the account will be completely removed from your credit report, eliminating the need of trying to remove it later on. Obviously, you’d want to provide a paper trail yourself for proof of payment. So pay by bank debit, credit card, money order, etc… If you decide to provide your phone number, they’ll call. But be aware they’ll be obtaining your phone number – meaning they might call everyday, 3 times a day wanting payment (sometimes in full or really high settlement amount). If you stress the settlement you want, fight them. You can’t insult them, but they are probably going to try to threat legal action, straight-up intimidation, some type of fear really. You have to remain strong. If not, say along the lines of ‘take it or leave it’ and if they don’t respond. Tell them to call you back when they’re ready to settle and hang up. There is no reason you can’t intimidate back as long as you act professional (no yelling, swearing, etc…). They want you to act out-of-control. It means they’re getting to you.