Offering a Collection Agency a Settlement

You can directly talk to the collection agency for the settlement. However, you should get the settlement agreement in writing. Debt settlement generally lowers the outstanding debt amount by 40-60%. However, exactly how much will the collection agency settle for depends on the agency itself.

It'll best on your part to contact the collection agency before they approach you. Tell them that you're eager to pay off your debts but don't have the sufficient amount of funds to pay them fully. Collection agencies would rather settle for a lower payment than not receiving any at all. A good negotiation process can lower your outstanding debt by almost 40-60%.

Also, remember to get the settlement in writing and keep the document for your records. Whatever be the settlement amount, pay it as soon as the agreement is made with the agency. So, while you negotiate with the collection agency, create an emergency fund and start putting the extra dollars to it to pay off your 'settled' debt.

Kyban,

Negotiating smaller balance judgment debt is not always going to work out the way other settlements will.

The issues:
Making an offer at say 800.00 their thinking will be "Okay, 800 now and 100 a month for the next 8 months". Why? You offered 800 and it is reasonable to believe a debtor can come up with an additional 100 a month to pay it off.
Also, they have a judgment. This provides additional methods to collect the whole thing through garnishment, lien on property, or levy on your bank account (all of this to the extent allowable in your state). They can be patient.

You may find that settlement for a reduced payoff is tough to do. Not impossible mind you. If you stick to it, you may get it done. The longer the judgment has been sitting there unpaid, your odds of success typically increase.

If no settlement, you should be able to get a longer term manageable monthly payment to pay it off over time.

Judgment debt can accrue interest set at your states cap, so you should definitely get something done to stop the debt from growing.

If you take a payment plan offer you should insist it be set at zero interest and get the whole thing in writing.

Not trying to come off as negative toward your efforts. I think you should do everything possible to get them to settle for less. I am just sharing some generalized experience and oft repeated realities.

Having said all that, times are tough and cash is king! They may grab any reasonable offer. Somebody somewhere on the other end of this has gotta eat too!

Best of Success!


Mileage may vary

Thank you all for the information. Here is a short version of what triggered my question to be asked..........I was contacted in Jan 2010 by a collection/law office Pressler& Pressler regarding a debt I owed. I made an arrangement to pay a specific amount monthly until the debt was resolved. I was told that if I defaulted on the payments my wages would be garnished which I understood. The law office/collection agency sent me paperwork to sign stating that I agreed to the terms, I signed the paperwork and they sent it to civil court to be filed. I made my first payment in Feb 2010 and have made payments every month since on time. On 7/13/2010 I pulled my credit report and found that a Judgement had been entered against me and now shows on my Credit Report even though I did not default on the payments. The Judgement was entered and placed on my report in March 2010 even though I had made our agreed upon payment starting in Feb and every month since. Although I signed the paperwork I was led to believe that this wouldn't effect me as long as a paid the debt which I am doing and intend to do until it is paid off. I understand that this information will remain on my report for 7 years. This is not fair and it hinders me if I apply for anything, even a job. Is this legal? Of course the paralegal Adam @ Pressler& Pressler told me there is nothing I could do because I signed the judgement. I find that hard to believe since I did not default on payments but the public record indicates I did. This law office has a reputation for of strong arming and not doing this that are ethical or always legal. Unfortunately, I found this out after all the arrangements were made. How can I fight this and get this removed since the information was prematurely entered on my credit report and public record? Can I appeal to the Judge even though I signed the paperwork which I didn't fully understand or should I say was mislead to do by the collection/law office. Also, when I spoke with Adam he says that they may settle with me if I make an offer. He would have to speak with his client to see if it was acceptable. (I am almost positive they/pressler is really the client) I am leary about them but I really dont know what to do. I want to have this marked as paid or removed asap but I can not pay the entire balance at this point.

Kyban,

The extra info you posted tells me that you likely signed a "consent to judgment" rather than a "stipulation to judgment".
A consent would describe what has happened i.e. credit reporting from accessing the court record.
Were it a stipulation you signed, it would only become a judgment if you did not follow through with the scheduled payments.

If you feel you were harmed or wronged in any way I would suggest you speak with a consumer attorney who is familiar laws in this area and it would be helpful if they were familiar with Pressler & Pressler.

If you continue to make payments until it is paid off it will become a paid judgment on your credit report. Make sure you check the report 30 or so days after the final payment. If it is not showing paid after 60 days from final payment, you will have to dispute this with the CRA's. Save all evidence of payments you have made in a safe place as you may need that detail later.

Wish I had something more positive to share.
Best to you and yours!


Mileage may vary

It's a little late to go back to court. I would offer 50%. Collection agency with a judgment is in pretty good shape. A garnishment would be easily done and would add more to the debt.

Thanks You. I decided not to offer a settlement at this point, because they already have the judgement. They may do the settlement and act on the judgement for the balance. I dont trust them; based on the way they have treated me and the complaints of others, I think I need to be rid of them ASAP. I am not going to let this get to the point of garnishment, I plan to pay them balance within the next month because they are so snakes and I dont want to risk them acting on a garnishment and then I have to fight them later for the return of any funds they may take. (FYI) I've been on maternity leave since Feb and will not return to work until Sept, so I am trying to get them paid before I become active at work again. Right now they can not garnish anything because I am not working.

Mileage may vary you have been very helpful. Thanks again

Does anyone know if my credit rating will increase once this is paid?

i bought a timeshare from westgate resorts in october 2008. we made payments automatically from our credit card. in April 2010 we were contacted by westgate and told that we were behind in payments and the maintenance fees weren't paid. we checked and brought up our payment which were one month behind. the csr told us that someone from the home maintance fee place would contact us. we never got a call or were contacted. In May we got a letter from a collection company named Pinnacle recovery inc which said that we owed more than one thousand dollars in maintance fees ( it should be 599.00). We received a second letter last week stating that it was the last and they would be taking further action because we did not contact them. we had been receiving numerous calls from various agencies about collection and renting our timeshare that we thought this was another one that wanted to get more money from us. we live in the caribbean and do not know much about collection agencies and how they work. But wasn't someone from the home owners association supposed to call us if we were behind. and if we were make arrangements with us before sending this to a collection agency. and wasn't the agency supposed to call us not just send two letters as final. can someone assist us