Trying to settle debt

by Jan
(Jacksonville, FL)

We have trying to settle over a Captial One bill, the debt is now in a Law Office Collection Agency in our local area, everytime we make an offer the person from CA always comes back with "THEY will not allow us to accept that." just got off of the phone and the collector is saying "I talked to THEM and THEIR bottom line on what THEY are willing to accept is 2300.00" (debt is 3200.00 we offered 1100.00, we are scared... we can not afford to pay for help, thus searching and found this sight.

Comments for Trying to settle debt

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Nov 04, 2011
Trying to settle debt

In answer to your first question, the "they" the law office/agency is probably referring to is Capital One, its client. In other words, the office cannot settle with you without getting its client to sign off on the amount of the settlement.

Capital One wants to receive as much as possible on the debt that you owe , which is why it hasn?t agreed to your settlement offers so far. It?s trying to pressure you into to offering more. If I were you therefore, I would let the person you are negotiating with know that you want to clear up the debt but that you simply cannot pay $2300. The industry standard for settling a past due credit card debt is actually 40% of the total debt although some companies will demand more and some will accept less depending on circumstances. If we apply the 40% standard to the total amount that you owe, then Capital One would probably be willing to settle with you for $1,280 ($3200 X .40). That means that your offer of $1,100 is not far off the mark.

With this in mind, you have a couple options. One, stick to your guns and hold firm to your offer of $1,100, making it clear that it is the absolute best you can do. Or two, increase your offer a little assuming you can, letting the collection agency know that you really want to clear up the debt, that you were able to find a little more money, but that the amount you are offering now is the best you can do. (Note: You will probably have to pay whatever you agree to settle for in a lump sum right away so don't offer an amount you cannot afford to pay.)

Bear in mind that whenever you are trying to negotiate a settlement, you risk being sued for the money you owe. However, credit card companies do not want to incur the additional costs of a lawsuit unless they absolutely have to. Also, if you are sued, you will still have opportunities before and during the lawsuit itself (even on the day of the hearing) to settle and get the lawsuit dropped. In fact, some judges will try to broker a settlement. Be sure that if you do end up in a hearing you let the judge know what you have done to try to settle your debt -- the offers you have made and the responses you have received to date from Capital One via the law firm/collection agency. (It's best to document all of this in writing; include the date of an offer, the amount of the offer, the date you received a response, who you talked to and so on.)

A final couple words of advice. It's best from a negotiating perspective if you contact the agency to make your next settlement offer, even if all you do is offer $1,100 again, rather than waiting for it to contact you. When you initiate the call, it will send a signal to the agency that you really are serious about clearing up the debt you owe.

Finally, to learn more about debt settlement, listen to this free debt settlement podcast. You may pick up some additional tips from it. Good luck!

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