Skip to main content
index page

How to contact creditors and collection agencies the best way

When you're in debt and cannot afford the payment, don't wait for the creditors or the collection agencies (CAs) to contact you. Instead, you should contact them and ask for a new repayment plan.

Negotiate debts with your creditors. Your creditors shouldn’t always be avoided as they’re the ones who can help you make the best decision with your debt accounts. Speak to them and tell them about your present financial status so that they can alter the repayment term for you and make it favorable for you to pay off.

This article gives you an idea of how to contact creditors/CAs to negotiate for the repayment plan.

How to contact creditors

Here are the do's and don'ts when contacting creditors.


Find out what creditors you owe: Obtain credit reports and all correspondence with your creditors and find out what creditors you owe to.
Whom to contact first: First, you make a list of your creditors, account numbers and balances, payment due dates and monthly payments. Find out which creditor you owe the most and pay him first.
Contact by letter or Phone: How do you contact creditors? Contact the creditor either by phone or in writing. If you don't know their phone numbers, you can check out our Creditors Address Book or call - 1 800 555 1212 (Information directory). It's better to write a letter and send it via certified mail; you can attach relevant documents (for example, the budget you've planned) along with it.
How to speak on the phone: Be polite while you explain your situation even though the creditor may be rude and offensive. Creditors will not be willing to help you if you're aggressive because they’re not obligated to offer you a special payment plan.
What to inform creditors: Explain your financial situation clearly and inform the creditor about the following:
  • Why you're behind on payment
  • Your current income & obligations
  • Your plans to get current on your debts
  • The exact amount you can pay monthly
Apart from the above details, tell your creditor about what other debts you have. If others have accepted your offer, he may as well accept the offer.
Account status: Ask the creditor or collection agency to verify the status of your debt account.
Contact details: Ask for the mailing address, fax number of your creditor along with the first and last name of the representative and his direct telephone number. You'll need these details if you'll have to contact him again.
The purpose of contact: Negotiate with your creditor for debt consolidation or debt settlement plan, or request him to extend the time for repayment.
Show your budget: What if the creditor refuses to accept payment? To avoid such a situation, prepare a monthly budget to inform the creditor exactly how much you can pay until your financial situation improves. A well-planned budget shows your commitment to repaying debts and helps you reach an agreement with the creditor.

But, what will you tell creditors when you can't pay? If you can’t repay the amount in full, negotiate with the creditor for debt settlement.

Offer to a creditor: If the creditor is interested in the amount you offer, then make sure you obtain a written agreement including the terms and conditions for payment.

You can prepare a summary of your conversation with the creditor and mail or fax it to his representative. If the creditor doesn’t honor the agreement, contact the representative by mail and find out the reason and how you can rectify the situation. A copy of the agreement will help speed up the discussion.

Not able to honor commitment: If you are not able to honor the agreement, then you should call the creditor asap and explain your new situation. It is important to maintain a good relationship with the creditor.
Court Action: If your creditors threaten to sue you for non-payment of debt, explain your problems, and ask them to hold off so that you can decide on your plan of action. Once you speak to your priority creditors, calculate your disposable income, your priority debts deducted from your gross income (gross income - priority debts), to find out how much is left to pay off other debts.


Which creditor to pay first: Do not pay more to creditors who are more aggressive. Prioritize your debts and pay accordingly.
Affordability: Don't offer an amount you cannot afford.
No commitment: Don't tell your creditors that you'll pay simply what you can. Creditors won't consider it a commitment. They'll be happier if you guarantee payment of a smaller sum rather than a larger amount that you may not be able to pay.
No agreement: Don't pay your creditors until you receive a written agreement. Do creditors have to accept any payment? No. You will have to negotiate to reach an agreement that the creditor accepts and you can pay too.
New credit: Don't apply for new credit/loans without your creditor's approval.

How to contact collection agencies

Given below are the do's and don'ts when contacting collection agencies.


Contact through letter/mail: Make sure that you never contact a collection agency by phone. In most cases, collection agents want to collect money and have no interest in settling your debts over the phone. They often get involved in illegal practices and violate the FDCPA.

When contacting the collection agency, make sure that you refer to the debt by listing the account number and not as "my debt".

What to check: Before you think about how to get a hold of a collections agency, first, check twice that you actually owe the debt. Check your credit reports to get the required details of your debt account(s).
Ask for contact details: As per the laws, debt collectors must inform you about their real names and the name of the agency they're associated with. Also, request the collectors to provide you with a written follow-up including their claims, the names of the original creditors, and what steps to take if you think you don't owe the money. Make sure you keep all documents sent to the CAs or received from them.
How to stop collection calls: If the collection agencies are making harassing calls, send them a Cease and Desist letter by certified mail (with request for return receipt) asking them not to contact you. This is how you handle collection agency calls. Once they receive your letter, they can call you only to inform you what legal action they'll take. In case the CAs contact you more than once, you have the right to sue them.
Calculate your affordability: Before making any commitment, calculate how much you can afford. The best way to settle with a collection agency is to know how much your budget can afford. This will also help in paying a settlement to a collection agency since you’ll be able to negotiate properly.


Negotiation by phone: Do not make any payment arrangement or agree to a settlement over the phone. All negotiations should be made in writing.
Loss of temper: Do not lose your temper when you deal with a collection agency even though they may sound rude. This is because it may put a set back to your chances of negotiation with the CAs. It is better you know how to negotiate with collection agencies to decide on an amount that you can afford to pay.
Late response: Don't ignore the calls from your collection agency even if the debt isn't yours. The collection agency may file a collection suit against you if they feel their out of court attempts are not working. So, send a debt validation letter to the collector asking him to validate the debt.

Finally, do not admit the debt if you don't owe it.

What if a creditor/CA contacts you?

At times, a creditor or a collection agency may contact you via phone or letter. Most creditors/CAs do not accept an amount lower than 30%-50% of the original balance. So, if you get this kind of offer, it's better to accept it. Once you accept the offer, you'll need to use letters such as "Acceptance of Written Offer" and "Agreement to Settle a Debt".

Whether you contact the creditor/CA or they contact you, make sure you know your rights under the FDCPA. Go through our mailing guidelines and use the checklist to make sure you communicate with creditors or collection agencies correctly.

Can you pay the original creditor instead of the collection agency?

If the collection agency has bought the debt from the creditor, then you’ll have to request the creditor to take back your debts. Otherwise, you’ll have to negotiate with the collection agency. It is usually easier to negotiate with a creditor than a collection agency.

Can a debt collector harass you?

As per the FDCPA, a debt collector cannot harass you. If you get annoying phone calls or a debt collector threatens you, you should report it to your state Attorney General’s office, the FTC (Federal Trade Commission), and the CFPB (Consumer Financial Protection Bureau). However, it is better if you contact your Attorney General’s office to know whether or not your state’s laws differ with the FDCPA.

Should you make a payment after being charged off? Can it help improve your credit score?

A charged off account means you haven’t made minimum payments on your credit card for about 180 days or 6 months. In this situation, the credit card issuer writes off your account as uncollectible. Payment after being charged off doesn’t help to improve your credit score, at least not immediately. Your account also stays in your credit reports for the required period, usually 7 years. However, over time, your credit score will improve if you manage your other accounts efficiently. However, if you become delinquent on another account, your score will again drop.

Then, why will you pay a charge-off?

It can help you to get credit approval from your future creditors.

After you make the required payment after being charged off, you can request your creditor to remove the account through the pay for delete option. If your creditor agrees, it can help improve your score.

Related Discussions

When can creditors contact your references? : Find out when your creditors can harass your references and how to deal with the situation and stop collection calls.

What to do if your creditor files a lawsuit against you : Find out what to do when your creditor files a lawsuit against you.

Judgment - How to deal with it : Know how to deal with the situation when your creditor obtains a judgment against you.

Wage garnishment - How and when it can happen : Know how and when your wages can be garnished by the creditors

Debt collection - What to know and how to pay off your dues : Find out the possible options to pay back debts.