How to Negotiate with a Collection Agency

If you own money to your credit card company and they have sent your account to a collections agency, there are a few steps you can take to ensure everything goes off without a hitch and that you don’t pay more than your really have to.

First of all, be sure to do all of your corresponding with the collections agency through letters or email and to keep copies of all correspondences. Ask for everything to be put in writing that you and the collections agency have discussed. This way, you are protected and you are both well aware of what has been agreed upon. It is best to avoid talking on the phone completely. But, if you have to, be sure to keep a record of who you spoke to and when.

When you start negotiations, you should always offer to pay no more than 25% of what you owe and let negotiations move from there. Don’t be fooled by the fake fees some collections agencies add on to the cost. Refuse to pay these extra fees. If you have to, hold out on payment. The longer your debt lingers, the less money the collections agency will make. Therefore, they will become more willing to settle on your terms if they see you cannot be bullied and that you are willing to wait them out. In addition, negotiate for a good credit rating so the situation does not negatively impact your credit record.