Working with collection agencies for reduced payments
People in Illinois who have outstanding credit card or other financial obligations may be able to negotiate with debt collectors for a settlement. If asked, many companies will agree to resolve a debt for a reduced lump-sum payment. Although not every one is willing or able to settle for a reduced payment, it is always worth asking.
Some debt collectors work for creditors on a contingency basis and only have a package of accounts for a few months. This means that the longer a certain debt collection agency has had an account, the more willing they may be to negotiate for a reduced lump-sum payoff. If a debt collector refuses to work out a deal the first time it is asked, it might agree the next time. A person's account could also be transferred to a different collection agency with more favorable settlement practices.
There are some types of debts and debt collectors that are more difficult to work with than others. For example, debt collectors will seldom allow medical bills to be settled for a reduced payoff because insurance contracts often don't allow it. Even if a debt collector is usually willing to accept reduced payments from account holders, a person's account could be flagged for no reduced payments due to account activity.
Not every person who has credit card debt has excellent negotiation skills or enjoys speaking with collection agencies over the phone. While attempting to settle unpaid debts and improve their credit, some individuals may wish to seek the counsel of an attorney to assist with handling communication with collection agencies and helping to work out settlement options.
Source: Credit.com, "How Do I Get a Debt Collector to Negotiate With Me?", Michael Bovee, Feb. 9, 2015