Before you attempt to settle, you should do everything possible to prevent your debts from going
to a collection agency!
You should do everything possible to prevent your debts from going to a collection agency.
Simply put, it is usually easier to negotiate with the original creditor. Avoid having an account turned over to a collection agency at all cost.
It varies from creditor to creditor, but most credit card companies allow 120 days to 210 days before an account is charged off. You are definitely in the danger zone after 120 days. After a debt is charged off, typically, the account is turned over to collections. While the account is considered a “past due” account and may be approaching the charge-off stage, it is often possible to prevent the charge-off by at least making one payment, along with all late fees. This holds the account from going further past due. Once the normal payment is being paid regularly, even though the account may remain past due, regular monthly payments may prevent further delinquency and prevent charge-off. Even better, would be to pay the normal monthly payment plus a little more in order to begin to catch up the past due payments. If a larger than normal payment is made, it may eventually catch up the past due amount and eventually cause the account to become current.
Many creditors will allow you to keep your accounts open or even to reopen them if you bring your accounts current. They also have programs where you can make 3 payments which are larger than the minimum in order to catch up and bring your account current. You may want to consider these options.
Debt Settlement Steps – Original Creditor
Take a deep breath. All new things seem overwhelming. You may have big doubts about doing this - you may have been told by debt settlement “professionals” that you will not be able to do this yourself, and that they are the only ones who know the secrets. Not true.
Let’s just break this down into manageable steps. You need to determine:
1. Who to contact
2. How to contact a creditor
3. The kind of personal circumstances a creditor likes to see
4. How much to offer
5. How to pay
6. Negotiate your credit rating
Who do you contact?
You would contact the original creditor’s customer service department. With the original creditor, it is perfectly acceptable to initiate contact via the phone. If you still have your credit card, the 1-800 number to call the company should be listed on the back of the card. Otherwise, you can look up old statements and find it. You can also call the toll free information directory at 1 800 555 1212.
How do you make first contact?
One thing to remember, as you speak to a representative, they are taking notes and these notes go into your account information permanently. Keep your story simple and straightforward. Don’t lose your temper or swear with a rep.
Once you call, ask for the customer service department. When the agent gets on the phone, ask for the status of the account. If the account is in collections, you may also find that you will be transferred to the collections department of the company. Don’t panic, this is all normal. Once you get the right customer rep on the line, ask them if they would be interested in considering an offer to settle the account, or if you have to go through the collection agency currently handling the account.
If the answer to the question “will you consider an offer to settle” is yes, don’t be surprised if you are made an offer on the spot. If you like the offer, tell them you will be following up with a letter and a fax, and where the paperwork should be sent. Keep in mind, though that you can usually get a better deal than the one offered. Ask for the representative’s first and last name, and direct telephone number. Never give them the money at this time, though they will try to get you to pay by check by phone or a credit card. You absolutely need a written agreement between you and the creditor before you sent them a single penny. If you don’t like the offer, tell them you will think about it and get back to them. Again, ask for an address and fax number.
If they don’t make you an offer, find out where to send the offer in any case. Be sure to get the first and last name of the person you spoke with, and their direct phone number if possible.
f they say that they won’t consider an offer (this rarely happens), thank them and ask for mailing and fax information. The rep may not be aware of settlement programs or may just be plain wrong.
So what’s the point of this initial conversation? Mainly: we said it three times; get the mailing address and fax number, customer service rep name and direct telephone number.

