how much could I get my debt reduced if I settle with a collection agency I know they purchase these bills for

Question

pennies on the dollar. And no I do not have money to make a big lump sum settlement

Answer 1

You can sometimes get them down to 40% of the amount owed. But this is dependent on how old the debt is, and how soon you can come up with the money. If you can not make a lump sum payment, the amount they would settle for is going to increase the longer you need to pay them. But before you hand over any account information or send them any money make sure you have the agrement in writting. This is so they don't come back at a later time and say you owe more money.

Also, if you settle for less and the settlement amount is more than $600, this is treated as unearned income. You will receive a 1099-C at the end of the year and will need to declare it on your taxes. So if you owe $10,000 and settle for $6,000 you will need to pay taxes on the remaining $4,000. Depending on your tax bracket this may or may not be a lot of taxes. But if you don't report it the IRS will audit and expect the tax plus penalties.

Answer 2

Good afternoon. As Zippy has suggested 50% is a good place to start your negotiations. Every collection agency is different. Some will work with you and some will be a pain in the butt. Somewhere in the 75% range of the original debt is probably the most common settlement that many credit agencies are willing to agree upon. If you settle upon an agreed amount there are very few if any collection agencies that will not require you make this payment in full by a certain date or the negotiated amount will be null and void. If you are not able to pay the agreed upon amount by this day, your only other option is to make installment payments to the collection company, but they will almost always require payment of the full amount if they allow you to make payments. Collection agencies put a lot of time and manpower into collecting these debts because they do not make any money until they collect on these debts. Therefore, everything they make back on the debt is not just pure profit. Good luck and your best bet is to negotiate with them and if you don't have the money borrow it from somewhere to pay if off.

Answer 3

Well, any company who turns over an account for collections only makes between 40-70% of the total actual debt, with the average being 50%.

I'd start by offering 50% of what your debt is as a settlement, but you'd have to be able to pay most of that in one chunk - otherwise, they have the right to refuse and insist you pay the whole thing if you have to make payments.

Answer 4

A creditor has the correct to refuse to accept not up to the entire quantity due, you owe the cash. Pay it. Paying the invoice in complete is not going to dispose of the derogatory historical past out of your credit score file. It will most effective mirror it as "paid in complete". The derogatory file will preserve to affect your credit score rating even though, as soon as it's paid in complete, your rating will broaden every month that there don't seem to be new delinquencies. If, for a few cause, your non-fee used to be justified (i.e. a roommate stiffed you on their section of the invoice) you must publish a "purchaser letter" to be incorporated as a side of your credit score file in order that potential creditors will realize the instances. In a borderline selection case many times it could make a change. Underwriters are men and women too and so they realize that many times we get into circumstances by way of instances that can be past our manipulate. You would check out asking CBCS to delete their report back to the bureaus (all 3 of them!) in attention of your fee in complete. They won't, however it does not harm to invite.

Answer 5

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