It is not unusual for a consumer to negotiate to reduce a past due debt owed with a creditor or a collection agency. However, negotiating with a credit is very different then
negotiating with a collection agency and more difficult.
If your account is still owned by the original creditor and was not sold to a third party, you should know that the creditor will be less likely to begin to negotiate a settlement for the debt until you are at least 60 to 90 days past due on the account. It is still possible to negotiate with a account that is not as far past due, if at all late, just more difficult. However, don't wait to long to start a negotiation, because if the account becomes 90 to 120 days past due, they will usually sell it to a third party collection agency. It is possible to get debts with creditors reduced 50% to 80%, depending on the creditor and how many months overdue you are. Don't be afraid to have a debt settlement conversation with a creditor because if they think it is in their best interest to settle and you get them to believe it may be their only chance to receive any money or because of a tight budget or very limited assets, the creditor just might settle.
If your past due debt has been sold to a collection agency, it will be much easier for you to negotiate a settlement offer, because they normally do not purchase debt for more than six to seven cents on the dollar. The longer the debt has been in collections, the easier it will be to get the overall debt reduced. With this in mind, you should start your negotiations at 25% of the amount owed and a ask for a complete removal of the account off of your credit report. All negotiations with a collection agency should be with certified letters and not over the phone. All agreements should be in writing before you pay any amount owed. Don"t take anything for granted with third party debt collectors, because they can be deceiving.
Settling to reduce debt with creditors or third party collection agencies will take some patients, so don't settle for anything more then you need to.