How To Negotiate Payments on a Charged Off Debt

There are some debts that may have gotten past you over the years that eventually went to collections and was listed as a charge off to the original creditor. Not everyone will be so inclined to pay off really old debts but many will for the peace of mind and the hope of improving their personal credit scores.

How To Start the Process
A charged off debt will likely no longer be the concern of the original creditor. After you failed to provide payment, the amount due was sold to a collection agency. If they have not contacted you first, you can make the initial effort to reach out and finally settle the debt. You may have to contact the creditor were the debt was first incurred to find out the name of the collection agency handling your file. Once you have obtained the information, make the call and keep a note paper with you so you can record the call date, time, and the name of the person you spoke with. You’ll also want to write down the details of the conversation for later reference.

Verify Your Debts
Speak with the collection agency representative and confirm the amount due. Don’t state what you think is due, ask them to verify. You can also ask for a letter of verification of the debt amount still owed. The collection agency usually takes about 30 days to complete. If there is any question about the amount you owe, wait for the letter before starting negotiations.

Start Negotiating
Once you confirm the amount due, assess your financial situation. Do you have enough to make a lump sum payment to settle the debt or will you need to make a payment arrangement to finalize the debt payment? If you can pay the debt in full, make arrangements to do so. Copy down the payment address and the amount owed. Ask the representative what the company policy is for confirming payment being made in full. Request a confirmation letter of the debt being paid and make a prompt payment to finalized the debt obligation.

If the amount owed is not what you readily have available, ask to speak with a supervisor at the debt collection agency and bypass the representatives who may not have authority to negotiate. Ask the supervisor where to send the half of the money (or whatever percentage you have) and let them know when the other half can be paid. The supervisor will then likely provide you with the address and accept the half payment. Arrange the next date of your payment and be sure to meet your obligation per the arrangement. Request a written letter confirming the arrangement from the representative.

If the payment arrangement is not accepted, definitely request the collector to verify the debt, giving you 30 extra days to come up with the money. The collection agent will likely accept the most amount of money they think they can get from you so don’t be put off by their pressure tactics. Only agree to pay what you can afford at the time you can afford it. The collector may threaten a lawsuit but as long as you are paying something on the debt, they will work with you in an effort to get their money.