How do I settle on debt?

-This is not everything, so please continue researching online.

Check out the Statute of Limitations for your state (SOL).

Paying the debt will not really do anything for your credit report; it will continue to show this debt for 7.5 years regardless of paying/settling.

Get everything in writing. The previous answer is correct, do not rely on phone conversations (even recorded conversations belong to them).

ALWAYS get the settlement offer in writing

NEVER give a creditor access to your bank accounts

ALWAYS keep copies of communications/payments

The IRS considers forgiven debt (amount owed - settlement) as income to be taxed. You should receive a 1099-C next year from collection agency, but don't forget to follow up if it doesn't come. IRS will send a bill a couple years later for the taxes plus fines and penalties.

Save up money before even considering settling. Being able to say "I'll pay you x dollars right now" gives you more negotiating power than agreeing to a payment plan.

Collection agencies buy and sell these debts all the time, so if you can't negotiate an offer you like right now, wait until it's sold to the next place that might be more willing to compromise.Do not call the debt collector. Write whatever you wish to say to the debt collector on a piece of white paper, fold it so that it fits in an envelope, put it in a envelope, address the envelope correctly, put the correct amount of postage on it, and mail it, without using the telephone.
1) go to prepaidlegal.com & see if PrePaid Legal is licensed in your state.

2) Sign up & may your first month (DO NOT PREPAY THE ENTIRE PLAN IF YOU DECIDE YOU DON'T LIKE YOUR LAWYER OR THEIR FIRM. THERE ARE NO REFUNDS.)

3) Call your attorney/firm once you get the packet in the mail.

4) Ask them to write a demand letter to the creditor, offering settlement on payment. (A good attorney will allow the company to make both an offer and a counter-offer once you offer to settle for LESS).

5) Either be willing to pay the amount, counter-offer and then counter-counter offer, or take them to court. Or perhaps declare bankruptcy.



Good luck to you! PPL helped me out a lot.
1) Call up the creditor.

2) Ask them if they will settle the account for less than full payment.

3a) If you are current with your payments, they say "No".

3b) If you are 3-5 months behind already, they might say "Yes".