IMPORTANT NOTE: Always use dollar figures, never percentages when making offers to creditors. If you use percentages and ask for a number like $3128, it sounds like you are working with some kind of company or program and have had training. You would want to offer $3000 which is a flat number and an amount you could save up or ask to borrow from friends or family.
You will want to pay close attention to the mailings you receive during the 90-180 days period as creditors may begin to mail settlement offers to you. These offers can range from very good (40%) to very high (90%), either way they provide a window of opportunity for you to call and accept or negotiate with them.
If you do happen to receive a low offer you like, here is a script to use to accept their offer:
“Hi, I received a letter from your company offering to settle my account. I’m calling to take advantage of that offer. Can you confirm the exact amount for me please?”
Rep will give you dollar amount and date you need to complete payment by.
“Ok, I’m ready to go ahead. Do you prefer that I mail in payment or should we handle it by phone?”
The rep will then set you up to make payment.
In the second high offer scenario, you can use this script to negotiate down further:
“Hi, I received a letter from your company offering to settle my account for $x,xxx. I’m calling to discuss that offer.”
Rep will bring up account and may try to get you set up for payment.
“I’m sorry, there is no way I can pay $x,xxx. But since your company is willing to settle the account, I’m calling to tell you that I can manage a settlement amount of $x,xxx” (Around 20-25% of balance)
The representative will usually decline the low offer and may counter offer or try to set up payment plan. Decline the payment plan and ask for the lowest settlement that they can authorize (usually 50%). If the amount is too high, tell them you cannot afford it but that you will be in touch. If amount is agreeable, say:
“I might be able to come up with that. Can we do it in 2 payments?”
They can usually do this and it makes it look like you really can’t afford to do it without saving up some extra money. They will then set up the payment details.
If you don’t receive any mailed offers, continue to call every 2 weeks during the 90-180 day past due period and use the settlement script from earlier.
Some other important negotiation rules to follow:
- Stay quiet after you make an offer or counter-offer, make them respond first.
- Don’t be afraid to walk away from a bad deal especially if you have time before charge off.
- Never agree to a deal you can’t afford. This will just make the situation worse.
