What negotiating power do I have...

Third party collectors usually do not have the ability to remove anything from you credit reports especially if it was placed there by the original lender. You can however send them a letter of offer to settle and stipulate that they not place anything negative on your report. All they want to do is get paid and make a profit so they will probably send you a counter offer. Aim low. Remember most of them bought the debt for pennies on the dollar! Make sure everything from them is in writing and do not give them a credit card or banking info. Pay by money order, Western Union or prepaid debit card. If you feel you do not owe them money at all don't pay them!

Thanks for the reply. They are the ones who put the negative report in, not the original creditor. Isn't it just as simple as them having it removed? Wouldn't they rather get paid? Or is there something I am not understanding.

I just want to make sure that if I have any leverage (and by holding the money, don't I?), I use it to it's fullest by hopefully getting negative remarks removed.

If you CAN 'settle' a outstanding debt, what % ( of your ORIGINAL amount) should you SAY (legally..) you will settle for? Can a CA legally refuse a 'settlement' amount?

I have heard that some collection agencies agree to settle with you for an amount that is far less than you owe but once you pay them the money, they turn around and hire a different collection agency to collect the difference.