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How can you reduce what you owe when it’s in collections?

| Jul 10, 2020 | Debt Relief

When you get a call from the same number over and over again, you know that it is a collections agency. You’ve been behind on several bills, but you’re also doing your best to catch up.

At this point, you’ve been fortunate enough that a family member has offered you $1,000 to settle your debts. You’ll have to pay them back, but it should help you stop these calls. Unfortunately, you owe $2,000. What can you do?

Remember to negotiate with collections agencies

In many cases, collections agencies buy debts, sometimes for much less than what is owed so that the original creditor can recover some of its losses. That’s a positive for you in some ways because it means that you can negotiate down what you owe.

Sometimes, collections agencies will allow you to pay 40%, 50% or another lower amount of the debt if you pay in a lump sum. If they agree to this, make sure you get the agreement in writing before making the payment to pay off the debt.

It isn’t always easy to negotiate with creditors, so if you find that they’re not willing to budge, you may want to call your original creditor and see if you can still negotiate with them directly or reach out to your attorney for help negotiating down what you owe.

Though you don’t have all you need to settle your debts, it is worth making an offer and seeing if the company will take it. If they do, you could save yourself a lot of money and stop the phone calls over debts you owe.