How Do You Negotiate Settlements With Collection Agencies?
Unsecured debt, such as credit card and medical debt, that goes unpaid for long enough is likely to end up owned by a collection agency. Collection agencies purchase old debts for pennies on the dollar and then attempt to collect the full amount from the debtor — usually with added fees. Fortunately, collection agencies are often willing to settle debts for much less than the original creditor. Because collection agencies purchase debt so cheaply, they still make a profit with a settlement. This is not the case with original creditors, for whom accepting a settlement means taking a loss. Check your state’s statute of limitations (SOL) to see if the debt held by the collection agency still falls within the time frame for a lawsuit. The statute of limitations dictates how long a debt is legally enforceable. Although a collection agency may still sue for a debt on which the SOL has expired, presenting the expiration as evidence in court will result in suit being dismissed. If your only m
