I was wondering what would be a good, realistic amount to ask for when negotiating a settlement on a charge-off. The debt is mine, I know I need to pay it, and the collection agency has been diligent about validating this debt. Their lawyers have told me that they will settle on this debt, and have asked me to start the negotiations. I've never done this before, so any help/advice would be very appreciated. The total debt is $2500: $1500 is the actual charged off debt and $1000 are the fees and interest from the CA. thanks
I just sent out 3. I'm starting low 30-40%, to feel them out. I am also asking for complete deletion of the tradelines. Remember, you can always go higher, but you can't go lower.
Be sure you both are on the same page about what "settlement" means. To the CA, settlement means a lump sum settlement, not future payments. A CA is not going to accept any lesser amount if they think you have the ability to pay them any more, especially in a lump sum settlement. After all, why should they accept less if they know they can sue you and get it all? You have to proceed very carefully. They are playing poker with you. Also, there is a good chance they are going to 1099 you on the waived portion of the settlement. In other words, you are going to have to pay income tax on that amount. I would start with disputing the extra interest and fees and get those down to a minimum. Make them prove that the charges are legal, allowed, and reasonable. They sound rather excessive to me. I've had lump sum settlement offers as low as 50 cents on the dollar. I've heard of lower offers, but have personally never recieved one. What else? Make sure the settlement agreement is final and that the remaining balance can never be sold or transferred to another CA. Try to get them to not report the trade line too.
skyy It also will depend on two things. First how old is the debt and what was DOLA. Secondly, what is the SOL where you are located. The older the debt and the nearer to SOL the more flexible the CA will be. One other thing, do not accept a settlement that does not include deletion for payment. No matter what the CA says, the have the authority to do that. fla-tan
