Knowledge Center


Can I Negotiate with Debt Collectors?

Reading time: 3 minutes

If you become significantly delinquent on a credit account, it’s possible that the debt may wind up in collections. This means your original lender has likely sold the debt to a third-party collection agency, which has in turn assigned one or more collectors to contact you repeatedly in an effort to see the debt paid.

An account in collections can stay on your credit history for a long time, damaging your credit scores in the process. A debt in collections is one of the most damaging types of credit accounts that can appear on your reports.

If you have a debt in collections, there may be some hope. In many cases, you can negotiate with the collector to accept a smaller amount than what you originally owed. If you settle for a lesser amount, you and the collection agency can agree in writing that the debt will be reported as “paid in full” or “paid as agreed,” which means that although the account will stay on your credit history, it may have less of a negative impact over time. 

Often, a collection agency will push to collect the full balance on what you owe, but collectors also know that getting something is better than getting nothing. An agent may decide it’s easier to accept partial payment now rather than chase you for months, which is why it’s important to speak with collectors and know what options are available to you.

Payment plans and partial payments

There are a few different methods of lowering your debt that may be acceptable to a collector, including:

  • Partial repayment. Although collectors buy debt from the original creditor for less than you actually owe and hope to make as much profit as possible by collecting the full amount, they may be willing to settle for less. Start your negotiations low, as the collector will try to raise the amount as high as possible. If you’re willing to pay 50 cents on every dollar you owe, start much lower, say around 20 to 25 cents.
  • A payment plan. Spend some time laying out your monthly budget. How much money do you think you’ll be able to put toward a recurring debt payment? If you had difficulty making the payments under the terms of the original creditor, you may be able to negotiate a lower monthly amount with the collector.

Get everything in writing

Before you hand over a single cent toward any payment agreement you negotiate with a debt collector, make sure you get the terms in writing. Then, after your debt is paid off, request a written confirmation that you have settled your debt. Sometimes the same debt can resurface with another agency calling to collect. Having documentation that you’ve already settled the debt can save you a lot of stress.

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