In the U.S., settlement offers equate to around fifty percent less than the original debt. The options are available when an account is sold to a collection agency. In instances where the account was an unsecured loan or credit card account, consumers are more likely to obtain and manage a settlement offer easily.
Has the Account Been Sent to a Collection Agency?
The original creditor is less likely to provide a settlement offer to pay off the debt at a lower-than-average rate. The first step is to determine if the account was sold to a collection agency. The consumer makes the distinction by reviewing the name and contact details that appear on invoices they receive. To get a settlement offer, the debt must be owned by an independent agency and not the collections department of the original creditor.
What is the Balance on the Invoice?
After an account is sold to a collection agency, it is likely that the total balance increases significantly. The agencies increase the balance to make a profit from their collection efforts. However, the consumer isn’t required by law to pay any balance beyond the closing balance of the account.
Negotiating With the Debt Collection Agency
Speaking to the collection agency gives the consumer the opportunity to negotiate a lower balance. Collection agencies want to collect any amount for the debt and are more likely to take what consumers offer. Some agencies try to play hardball and threaten a lawsuit. But, the agency’s hands are tied. If the consumer is making an effort to pay the debt, the agency doesn’t have grounds to sue, and the consumer is more likely to acquire a better settlement offer through their efforts.
Removing the Listings from the Credit History
Once the settlement offer is accepted and paid, the consumer is within their rights to request the removal of the account from their credit history. If the collection agency doesn’t abide by the consumer’s wishes, he or she has the option to file a report through each credit reporting bureau.
In the U.S., debt settlements help consumers save money and avoid a negative impact on their credit history. The settlement offers are available to consumers who negotiate with collection agencies. Consumers who want to learn how to obtain and manage a settlement offer find more information here now.