9 Tips to Successfully Negotiate With Debt Collectors

Woman on the phone negotiating with debt collectors

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If you have an account in collection status and you want to take care of it but can't afford to pay the balance in full, you may be able to negotiate a more affordable payment with the debt collector.

Even if you can't get the collector to agree to accept a lower payment, you may be able to work out an arrangement to pay off the debt in installments.

Knowing how to negotiate with debt collectors will help you work out a payment solution that helps you take care of the debt collection account for good.

1. Understand How Debt Collectors Work

Debt collections can happen to even the most financially responsible consumers. A bill may slip your mind, you may have a dispute with the creditor over how much you really owe, or billing statements can get lost in the mail before you ever know the debt exists. Occasionally, debt collectors fabricate bonus debts and attempt to scare consumers into paying them.

No matter how much you may want to ignore the collection, taking care of collection accounts is usually better for you and your credit score in the long run. Once you pay, you'll stop the collection calls and letters for good, improve your credit history, and eliminate the risk of being sued for the debt.

As with any negotiation, knowing as much as you can about the other party puts you in a better position to get what you want out of the deal. The debt collector's goal is to make as much money as possible from collecting the debt and they do this in two ways. Debt collectors can add fees on the debt as allowed by state law. Or, junk debt buyers earn profits on debts they've purchased for just pennies on the dollar.

Collectors only make money when consumers pay the debt. They can't seize property or take money from consumer bank accounts unless they sue and obtain a court judgment and permission to garnish the consumer's wages.

2. Know Your Rights

Before you speak with a debt collector, get familiar with your rights. Otherwise, debt collectors who are savvier and more experienced than you can easily take advantage of you.

Here are a few things you should know:

  • Debt collectors can only call you between 8 a.m. and 9 p.m.
  • They can't harass you or use profane language when speaking to you.
  • They can't threaten to take action that's illegal or that they don't intend to follow through with.
  • Debt collectors can only contact your employer, family members, and friends to contact information about you.

Debt collectors can attempt to collect from you by calling you, sending letters, and listing a debt on your credit report as long as the debt is within the credit reporting time limit.


You can stop calls and letters by asking the debt collector to stop contacting you. However, you generally can't remove a collection from your credit report unless it's inaccurate or beyond the credit reporting time limit.

3. Make Sure It's Your Debt

Don't take for granted that a debt collector who contacts you is pursuing a legitimate debt. Debt collectors have been known to pursue bogus debts or even attempt to collect on debts that have already been paid. Approach all debt collections with a healthy dose of skepticism.

Within five days of contacting you, the collectors must send you a debt validation notice. This notice lists how much money you owe, names the entity to which you owe it, and details steps you can take if you believe there's been a mistake.

You have 30 days from receiving this notice to request, in writing, that the debt collector send you proof of the debt. Once the collector receives your debt verification request, they can't continue collecting from you until they've sent the proof you asked for.

Once the collector sends the proof and you're satisfied the debt is legitimate, you can proceed with the rest of the negotiations. Otherwise, if the collector doesn't send sufficient proof, send the collector a cease and desist letter asking they stop contacting you and dispute the debt with the credit bureaus.

4. Get Some Leverage

There are a few things that can work in your favor when you're negotiating with a debt collector. First, if the debt collector has a lower chance of winning a lawsuit against you, they may be more likely to accept a partial payment.

The statute of limitations affects is the time period that a debt is legally enforceable. Once the statute has passed, the debt collector will have a tougher time getting a court to force you to pay the debt, if you use the expired time limit as a defense in court.


Be sure that you don't accidentally restart the statute of limitations by admitting to the debt or making a partial payment. The statute of limitations varies by state and the type of debt and starts with your last activity on the account.

Another time period that can work in your favor is the credit reporting time limit. This time period affects whether a debt can be listed on your credit report. If a debt has fallen off your credit report or is scheduled to fall off soon, there's less incentive for you to pay it, because it's no longer affecting your credit.

You may, however, feel motivated to pay off the debt because of a moral obligation, to stop debt collectors from contacting you about the debt for good, or to eliminate the risk of being sued. Using an expired credit reporting time limit as leverage may encourage the debt collector to work with your budget.

Generally, the older the debt, the more likely it is that you can convince the debt collector to accept less than full payment. Research and verify both the statute of limitations and the credit reporting time limit before you start negotiating with the debt collector.

5. Figure Out What You Can Afford to Pay

Paying off your debt is important, particularly if it's keeping you from improving your credit or getting approved for other credit cards and loans.


Before you offer a payment to the debt collector, consider your other financial obligations. Take a look at your budgeted income and expenses to figure out what you can afford to pay toward the debt.

Consider whether you can pay it all in a single lump sum or break it into a few payments. Keep in mind, debt collectors will want to collect as much as they can as quickly as they can, so spreading your payments over more than a few months likely won't be an option.

You may, for example, offer to pay a lump sum of $3,000 on a $5,000 debt. You'll ask that the debt collector honor your payment as full satisfaction of the debt, which means the collector cancels the remaining $2,000. Or, you might offer to make four monthly payments of $1,250 to completely pay off the debt.

Make sure you can afford to pay what you've offered. Once the debt collector accepts, you may only have a small window to make the payment. This process is known as debt settlement.

6. Know How Your Payment Will Affect You

Be aware of what your offer means for you. Your payment will be reported to the credit bureaus if the debt is still within the credit reporting time limit, which is seven years for most debts. Paying in full typically looks better than settling your debt, but a payment looks better than non-payment.

Any payment on the debt will restart the statute of limitations on the debt giving the debt collector more time to sue you. It's important that you make an agreement what will satisfy the debt and eliminate the risk of being sued in the future.


Settling your debt may have tax implications. If more than $600 of your debt is canceled, the collector has to report the canceled amount to the IRS. You'll be sent a 1099-C Form to include the canceled debt as income on your next tax return.

7. Be Prepared for a Counteroffer

Start the negotiation by offering a payment lower than what you really want to pay. The debt collector will probably counter with an amount higher than your offer or may even insist that you pay the full amount. The goal is to eventually get the debt collector to agree to an amount at or less than what you've decided you can afford to pay.

8. Stand Your Ground

Debt collectors use any information they can obtain about you to collect the debt from you–so be careful about what you divulge in your conversations. Remain in control of your emotions no matter what and talk only about your offer. Avoid discussing your income or other financial obligations.

Be aware that debt collectors have access to your credit report and may use the information in it, such as new loans or timely payments on your other accounts, to push you into paying more than you've offered. Remain in control of the conversation and stand firm in what you're willing and able to pay. Don't let a collector bully you into letting your other financial obligations slide.

You may have to go several rounds with the debt collector before you reach an agreement. Don't be surprised if you end up speaking with several different people at the collection agency. Keep notes of all your communications with the debt collectors, noting who you spoke with and details about the conversation.

9. Get the Agreement in Writing

Once you and the debt collector have arrived at a payment amount that works for both of you, get the agreement in writing. This is particularly necessary if you've worked out a payment arrangement or settlement amount.

Don't make a payment until you have a written agreement from the debt collector. Keep a copy of the agreement and proof of the payments you make just in case there's ever a question about whether you satisfied the debt.

For some, it's easier to write a check for the full amount and be done with the debt completely. If you're looking to save money on the debt or you simply can't afford to pay it in full, however, negotiating a smaller payment is worth the effort. You can do this on your own, even if you have to type up a letter to start the negotiations. It's less expensive than hiring a debt relief company to negotiate on your behalf.

Frequently Asked Questions (FAQs)

How do you get collections off your credit report?

In general, collections will be on your credit report for seven years from the date of the first missed payment. It stays there whether or not you pay the account, but the status will reflect its payment status. Paid collections will have less of an impact on your credit score than unpaid collection accounts.

What is debt settlement?

Debt settlement refers to resolving debt by paying less than you owe. You can negotiate with creditors on your own, and there are also companies that settle with creditors on your behalf. Working with a debt settlement requires stopping payments on your debt and sending money to the settlement company instead. This will significantly lower your credit score until the settlement company starts settling your debt. Interest and fees also accumulate while the company settles the debt. Debt settlement companies also charge fees.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
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  2. Minnesota Attorney General's Office. "Debt Buyers."

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  14. Consumer Financial Protection Bureau. "What Is the Best Way to Negotiate a Settlement With a Debt Collector?"

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