how to negotiate settling debt over the phone

Personally, I wouldn't settle a debt without first having everything in writing.

Read this post on negotiating:

http://www.debtconsolidationcare.com/forums/showthread.php?t=35804

Hi!
Welcome to the forums!
Yes, it is hard to negotiate with the debt collectors. They are quite aggressive fellows. You need to have patience when negotiating with them. Talk politely with them even if they don't behave well. Explain clearly that you are going through financial hardship and so will not be able to pay off the entire amount. Tell them the amount you can pay to them by a certain date. In this respect, I would like to mention that, creditors/collection agencies usually are don't agree to negotiate if the settlement amount is too low. However, if they refuse to negotiate with you, then tell them clearly that you'll file bankruptcy. Most creditors/CAs don't want consumers to go for bankruptcy. So, this might do the trick.

One more thing, record the entire conversation in a tape. This way they can't twist the terms and conditions of the agreement. Since verbal agreements are not legally binding, so I would suggest you to go for a written agreement.

First rule of thumb...if you want to settle, you must have the money available now. Not two months from now. Second rule...call the last few days of the month....collectors are trying to meet their goals. January is an excellent settlement month....people are broke from christmas and collectors are scrambling to collect.

You need to make the call...not have the collector call you. It puts YOU in control, not them. Unless you are serious about bankruptcy and your credit report backs you up, dont threaten bankruptcy. Collectors hear it all day long and 90% of the debtors have no intent on filing or really have no grounds or not enough debt to file. It is an empty threat and many law offices will still start the legal process even after hearing a debtor claim they will file bankruptcy.

When you call, stay calm, never raise your voice and state the facts. " I have gone thru some financial hardship and I have $3000 available right now to settle with your client. If you will fax me a settlement offer, I will overnight/western union the payment to you." Have a fax number available, even if it is just to your local FEDEX/Kinkos office. If the collector is hostile, call the collection agency back on the main number and ask for a qualified manager....make sure you ask the receptionist for her name....you do not want to be put back with the same collector and if the receptionist knows that her name is being brought into it, you are more likely to get thru to the right person. Explain clamly to the manager what has happened.

A 30% settlement is not necessarily going to be accepted depending on the client and the age of the account. You need to do research to find out if this percentage is even in the norm. Law offices and collectors can only settle on %'s that they have been given blanket approval for. Some creditors just wont go that low.

Taping is always a good idea. Even though it may not be admissable in court, if the collector gets aggressive and violates FDCPA, your state attorney generals office is always happy to hear these tapes.

Great advice! Have everything in writing, make sure it lists all terms and payments and states that they are agreeing that this is a final settlement so the debt can never be chased later.

From what I have read I wouldn't make any agreements on the phone with a collection agency. I have read many accounts of people hearing from another collection agency about the same debt later on, I wouldn't trust their claim that you are satisfying the debt over the phone, these people are well known for doing whatever they can to get money. Don't ever give out your bank info or any other personal information over the phone, I wouldn't even anwser the phone because according to many accounts I have met, just admitting that a debt is yours can give a scum sucking CA what they need to go ahead with a lawsuit. They very often don't have any proof to collect on a debt they alleged to be owned by them, if you pay them then they have that in their back pocket in a court, they have that payment. They may turn around and sue you for the balance.

See point #9 in my linked post

9. Make no promise to pay without the written settlement agreement. Don't pay or make a promise to pay on the first call.

You can do all the negotiating over the phone but the fianl agreement must be in writing obviously.

First, thanks for everyone's response, got a lot of good advice here.

Well, I got up the nerve, took in everyone's advice, and even wrote a few things down from what I read here to help me. Here's what happened: I called the law office to try and settle the account they asked for my phone number, bank info, and employer number several times, I said, "no thanks, I want to try and settle this please", I was very polite. They said in order for that to happen I would have to fill out a "hardship application" that would require my address, phone number, employer, income amount, bank info, bills, expenses, etc. I would send it back to them, they then would show it to the CA and the CA would decide to take my offer or not. So that was it, they didn't agree to anything. So, what's up with this? Anyone heard of this before? Is this a ploy or something that will really help?

I forgot to mention that I was told I HAVE to fill out everything on the application in order for it to be considered.

You missed one of the most important rules of settling....you called on the first day of their new month....you should have waited until the last 3 or 4 days of the month, when they are scrambling to meet their goal. They now have a month to beat you down and go over your whole budget. Yes, what they are asking for is quite standard....however often at the end of the month, those little things get thrown out the window.