What % to settle??

If it is with a CA I think 30-80% is pretty normal. If an Attorney has it, it seems more like 50-80%. I have also had difficulty with getting deletion. For some accounts it seems to be no issue. With others I could pay 2x the debt and it would not be removed. This is only my experience and hopefully others will comment.

 

That's going to be up to the creditor. Some can be very generous, others are not.

Some tips:

1) Pick a good person to work with before you start negotiating. If the first person you talk to is rude, talks over you, and is pushy, call back and talk to someone else. Also, feel them out before you give them your account number and they know who you are.

2) Let them be the first to make an offer. It's a standard negotiating trick to let the other guy put their cards on the table first. Once they give you a number, then you can start negotiating down.

3) Have a good reason why you can't pay the full balance. Make one up if you have to. You don't have any money, but you're expecting a windfall. It's only x number of dollars. This gives them strong incentive to accept a lower offer.

4) Let them know there is something else you could do with this money. You could use it to satisfy this debt, or a different debt. Maybe you could use the money to fix your car. The point is you want them to think that you feel paying this debt is optional, depending on how good a deal you get.

5) Get your offer in writing before you pay. Sometimes mistakes are made, and a written settlement offer makes sure that there is no confusion about what was agreed to after the fact. Keep the settlement offer in a safe place for a long time. If you don't have a fax machine, try to find one you can use.

6) Most collectors work on commission based on how many dollars they collect in a month. For this reason, settlement offers tend to have a deadline of the end of the month.

Be aware of this. If you start your negotiation at the beginning of the month, they're less likely to pressure you for time. If you don't like the offer you get at the beginning of the month, call back near the end of the month when they're more likely to come down a bit more to "make their numbers."

7) Often when collectors give you a deadline, it's artificial, based on their convenience. They may imply that something bad will happen if the money isn't received by x date.

Sometimes that's not BS. Sometimes something bad really will happen if you miss that deadline. If they say they need a token payment to hold an account, there is a good chance that's true.

8) Once you have a settlement offer that you've agreed to, pay the money. Be prepared to use some fast payment method, check by phone or western union. I can't tell you how many times I've seen a settlement messed up because the debtor delayed in making the payment, and it came in a day late.

9) Last, I wouldn't assume you can get deletion for your settlement offer. When I was a collector, this was non-negotiable. We didn't do it, we didn't discuss it. Many say it can be done and I'm sure it can with some creditors, but not all of them will do it.

I hope this helps. Good luck.

 

I have a question to add. My DH wants to try and settle an account he has.If the account has been purchased by another party and they have now added their own fees and interest on it. is the % offered based on the "current amount due" or the OC amount due when the account was purchased? We have a CITI account , original amount when purchased was $2100, now it was purchased by RMA (%#@^&*) for current amount due $3200 @ 8% interest, That's a big jump in a month!! They sent settlement for offer for $1700. That's 53.25% of their amount, Of course I'd rather pay that % on OC amount.=$1118

 

It is all about negotiation. If they offer $1700 there is no reason you can't counter with $1200. Any indication they are going to or are close to filing? Most CA won't file for <$2k but you never know. Once they file suit they will still negotiate but it seems like the want more money then!

 

Pay 100% if you have to...BUT don't pay $0.01 if they REFUSE TO REMOVE!!!

Not that I'm a "BADDIE EXPERT"

 

IF THEY WANT $2,000...THEY PROBABLY BOUGHT THE DEBT FOR $20-$200!!!

They have TONS OF "WIGGLE" ROOM

 

It can't hurt to try to negotiate the dollar amount down, but they will base it off the total amount owed, including all late charges and fees.

 

George, didn't you say you owned a business? If you do, I'm sure you understand how it's possible to make a profit on every transaction and still go broke.

Debt isn't purchased one account at a time. If they do pay pennies on the dollar, it's because they expect a large portion of that debt will never be collected. Then you add what they have to pay to collect the debt, employee salary and benefits, office rent, utilities, phone bills...they're not looking at how much they have to collect to make a profit on one account, they're looking at what they have to collect to make maximum profit on all the accounts.

 

You will be able to settle that account for 50 cents of orig-Bal, I have done just that. It took 10mo but they did come around to my way of thinking.

 

Re: Re: What % to settle??

MOST people do not care about the P&L of a CA...

I know they sell a PORTFOLIO...

They do the same thing with MORTGAGES...they are bundled in a group like $10,000,000 or $100,000,000 or something like that...they sell to INVESTMENT GROUPS or PRIVATE INVESTORS...then your MORTGAGE is collected by a SERVICER...you don't pay the "REAL" owner of the MORTGAGE...(USUALLY)

 

Here are some accounts I have settled for:
MBNA 40 cents on dollar
Chase 35 cents
A lot of them at 50 cents but the worse 2 were AT&T universal 80 cents and CITI 80 cents. At CITI I was told that We are so big that you are even lucky we will come down to 80%. It's like Ins make the payments but just turn in a claim once then you see their true colors.

 

Re: Re: Re: What % to settle??

Right, but the CAs do, and they will keep it in mind when they set their policies.