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10 Tips For Negotiating With Creditors

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Negotiating with Creditors

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Article originally published May 5th, 2017. Updated October 26th, 2018.

If a debt collector or creditor is calling about a balance you can’t pay in full, the last thing you probably want to do is talk with them. But here’s one reason to pick up the phone: you may find the creditor or collector is willing to negotiate.

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    Debt collectors tend to buy debts for pennies on the dollar, which means they don’t need to recoup the full amount you owe to reap a profit. As such, there’s a chance one will agree to a settlement. Creditors, too, may be good with reaching an agreement, since the alternative is to write the debt off as a loss.

    Of course, there are some best practices when it comes to debt negotiation, including explaining your current money situation, taking notes, and obtaining written confirmation of any settlement you do reach.

    Here are ten full tips for negotiating with creditors and collection agencies.

    1. Stick to Your Story

    The person on the other end of the phone doesn’t want to hear all the details about why you’re not able to pay your bills. However, they do need to know if you are in a hardship situation and what you are trying to do to get back on track.

    It’s helpful to come up with a few sentences that you can use consistently when you talk with creditors.

    These sentences could include:

    • “I was very ill, out of work for two months, and now I am trying to get caught up.”
    • “My wife was laid off, and I’ve taken a significant cut in pay. She’s looking for a job so we can catch up, but we don’t have any money to pay right now.”
    • “My interest rates have doubled, and I can no longer keep up. I am meeting with a bankruptcy attorney to see whether I should file.”

    Be truthful! If you tell everyone a different story, especially one that’s not true, it’s bound to backfire.

     2. Avoid Drama

    Try to stay calm, no matter what the person on the other end of the line says. You’ll get nowhere if you lose your temper. If you find yourself losing your cool, just tell the collector you’ll have to talk with them later and hang up. If you need to talk with that representative again, tell them you’d like to record the conversation. That usually keeps them on their best behavior.

     3. Ask Questions

    If a collector says you’ll be sued, or that you’ll lose property if you don’t pay, just calmly ask for specifics: “When can I expect to be notified of this lawsuit?” Or “When will you take the money from my bank account?” Some of these threats may be illegal, and the more information you have, the better.

     4. Take Notes

    Have a pen and paper handy, so you can take written notes whenever you talk with a collector. Write down the name of the person you talked to, when you talked, and what was discussed. Not only can this help you take the emotion out of the situation, but you’ll also have a record if the creditor or collector broke the law in their attempts to collect.

     5. Read (& Save) Your Mail

    Don’t throw away mail from your creditors or stuff it in a drawer. Open it, read it, and save it in a file.

     6. Know What You Can Afford

    Go over your income and expenses with a fine-tooth comb, figure out what you can afford, and only agree to pay a realistic amount. Generally, you can negotiate the best settlement on a debt if you can come up with a lump sum amount to resolve the debt.

    If you agree to a payment plan, you will likely pay more over time. If you do agree to a payment plan, make sure you understand the total amount you will pay.

     7. Deal With Creditors, Not Collectors

    If possible, try to work out an agreement with your creditors before a bill is sent to collections. While late payments affect your credit reports and scores, collection accounts can result in even greater damage.

    By the way, it’s a myth that as long as you are paying something toward a debt (even $5 or $10), it can’t be turned over to a collection agency. Once a debt has been sent to collections, you may have no choice but to deal with the collector.

     8. Get it in Writing

    When you do come up with a payment arrangement, or a debt settlement letter, get it in writing before you pay a penny. Otherwise, the terms can change, and it will be your word against theirs. We’ve heard of consumers being hounded for balances they thought were resolved years before.

     9. Get Help When Negotiating With Creditors

    If you are having trouble coming up with a repayment plan that works, find out whether a credit counseling agency can help you work something out with your creditors. If it is unlikely you’ll be able to pay back your debts, or if debt collectors are hounding you, request a free consultation with a bankruptcy attorney.

    Even if you decide not to file, the attorney can tell you what a creditor can and cannot do to collect.

     10. Put the Past Behind You

    Remember, catching up on a delinquent account, or paying off a collection account, won’t improve your credit unless you can get the creditor to agree to remove the late payments.


    • Late paymentscan stay on your credit report up to seven years from the original delinquency.
    • Charge-offscan remain for up to seven years from the date the creditor wrote the debt off their books as a loss.
    • Collections accountscan remain for seven years plus 180 days from the date of the delinquency immediately ahead of the collection activity.

    Still, all hope is not lost. Even if it’s not possible to have negative items removed from your credit reports, you can still begin to build better credit as soon as your debts are resolved.

    Plus, assuming no new negative information emerges, your score should come back up the further and further you get away for all those original delinquency dates.

    In the meantime, you can check your credit score using’s free credit report snapshot. This completely free tool will break down your credit score into sections and give you a grade for each.

    You’ll see, for example, how your payment history, debt, and other factors affect your score, and you’ll get recommendations for steps you may want to consider to address problems.

    In addition, you’ll also find credit offers from lenders who may be willing to offer you credit. Checking your own credit reports and scores does not affect your credit score in any way.

    Should I Settle a Debt?

    Keep in in mind; there are certain ramifications associated with agreeing to a debt settlement that’s less than what you owe. While the exact effects on your credit score will vary, depending on your full credit profile, agreeing to pay less than you originally owed can wind up hurting your scores — but it still may be your best course of action.

    Allowing a debt to go unpaid can lead to further adverse action from your creditor or collector, like a charge off or judgment. And judgments can lead to garnishment of your wages or assets.

    Plus, paid collection accounts sometimes weigh less heavily on your credit scores (depending on the credit score model) than unpaid account, especially in the long term. In fact, some newer credit scoring models ignore paid collections entirely. So, depending on what you owe and what settlement a creditor or collector proposes, the ends may justify the means.

    Negotiating With Different Types of Creditors

    You will find that there are several different types of creditors you have to deal with when it comes to finding a good way to settle your debt. The following are a few of these creditor types and some other useful information you can carry with you into negotiations.

    Negotiating Student Loans

    You will find that it may be difficult to negotiate when it comes to student loan debt. Therefore, you should consider government programs that will allow you to reduce your monthly payments, extend the repayment length, or cancel some or all of the debt completely.

    Negotiating With Mortgage Companies

    There are home loan modifications that can help you with monthly payments if you find that you are struggling to keep up or pay what you need to pay. These modifications may be a great solution to finding a way to free up some money for your living expenses.

    Negotiating Secured Loans

    It is easier for you to negotiate a secured loan over an unsecured loan because the debt has already been secured with collateral. For this type of negotiation, you can lead with bankruptcy if that is the case, have the funds available to make a payment, and focus on the bigger picture; the debt needs to be paid, so how can you negotiate payment?

    Negotiating With Credit Card Companies

    Negotiating a credit card debt settlement has to be one of the easiest debts that you can negotiate. However, it is still going to take some time to reach a reasonable and comfortable settlement amount agreed upon by yourself and the credit card company. All of the negotiation tactics listed above would be good for this type of negotiation.

    Consult With a Credit Counselor

    If you find that you have tried all of the tips we have included, but you are not making any progress or are unsure of the steps you need to take for a specific creditor negotiation, it could be in your best interest to seek the services of a credit counselor.

    A credit counselor can help individuals throughout the negotiation and debt settlement process while also educating them about the tools that are available to help them reduce and eliminate their debt.

     Dealing with a debt collector? We’ve got 50 tips right here to help you out. And, if you have any questions about negotiating with creditors and collectors, feel free to ask away in the comments section below. One of our credit experts will try to get back to you.

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      Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

      Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

      • Coral Mercintile

        You should negotiate with the creditors with good manners, Ask debt collectors or creditors politely for some time and tell them a story of your life and you will pay them definitely but right now you can’t have such money. You can also consulate with a lawyer and take some advice for debt repayment.

        • lindamy

          Most are nasty. I had a financial bump after a divorce – treading water. The debt collector called my mother’s house, called and threatened me at my temporary job telling me to sell some of my family’s items to pay them. I didn’t know my rights then. I set up my own plan on a percentage basis and it took 5 years but everyone was paid.

      • Jerry

        But be careful when contacting these, too. You will be charged a fee by them, and they will collect their service fee first before actually paying any, or much of your debt with the money you send them. Also, they won’t tell you about the possibility, or certainty that you will receive the 1099-C from your creditor which can put you in dire straits with I.R.S. if you didn’t realize it and all of a sudden are faced with taxes to pay on what was written off as equivalent of cash income as far as the I.R.S, is concerned. The insolvency worksheet may bail you out, but be aware that any debt forgiven may come back to haunt you as income when it comes to income tax time. Another problem with the debt negotiation companies is the amount they charge you; you are likely to be just as well off doing your own negotiating and using that money to pay down your debt. Also, be sure you have no other recourse before filing for bankruptcy; between that and any debts turned over to collection agencies, you will grow old prior to having your credit score come back to where you can qualify for a loan, or get any kind of decent interest rate if can get one.

        • Ron

          It depends who you use. I just completed a program with Countrywide debt relief and they not only settled all my debts, but they don’t charge you until the debt is settled. I was very skeptical of this myself. The best part is that prior to going with them, my phone was blowing up 5 to 10 times a day from collectors and they made all those calls stop. The calls never bothered me, but my wife would go crazy about them all the time. Not only did I save time and money, they took the stress of those calls away. The representative that helped me sign up was Mark and I contacted him almost 3 years later to thank him and he was still working there. I figuered for sure he had moved on, but I was wrong. Like anything else, you just have to do your homework. Maybe I just got lucky.

      • Gerri Detweiler

        Then you have two choices: One is to contact a consumer law attorney with experience in credit reporting cases. You may have the basis for a credit damage lawsuit. Visit to find one in your area. The second would be to file a complaint with the Consumer Financial Protection Bureau. In the meantime, make sure you get your free credit score. You may need documentation of the impact to your credit scores.

        • jwarelp

          A lot of states attorneys general have a consumer protection division. You can usually find a complaint form online. Fill that out and explain the situation. Make sure to provide them with any documentation you have. Often they will mediate a settlement with the collector. In your case, since it is paid they will have to stop. Collectors do not like the Attorney General looking into their business. And don’t forget to ask for $1000 (the statutory penalty allowed under the federal FDCPA) per occurance. So if it is 1 account and you have sent 3 letters, ask for $3000. It works, trust me, it worked for me to the tune of $8000 from the collection agency.

      • Gerri Detweiler

        Thanks Steph – have you been able to resolve your debts?

      • Credit Experts

        Very interesting perspective. Thanks for sharing.

        • machelle

          I have all three of my credit reports. On the Trans union some items were removed, but on the experian and equifax those same items are there. Should they removed also?

          • Gerri Detweiler

            It depends. The three agencies don’t share information with each other, if that is what you are asking. Did you dispute that information with the other agencies as well? If you did not, go ahead and do so if you think it’s inaccurate. And if they confirmed it but you are convinced it is wrong you can contact the CFPB for help or consult a consumer law attorney.

          • Credit Experts

            If they are inaccurate or if they are time-barred, they should be. But the bureaus don’t share information. So you would need to dispute those items with each credit reporting agency. Here’s how: A Step-By-Step Guide to Disputing Credit Report Mistakes

      • Gholston

        At some point the creditor will generate a 1099C and attach to state tax refunds while at the same time selling the debt to a collector. The collector will try a number of maneuvers to see if they can collect anything including all the stacked up fees. Unsuspectingly some people pay twice with no recourse of recovery. The collection industry knows it’s way too much of a hassle and most people just let it go. So now I find little LLc’s that set up shop and create debt invoicing from purchased database information. One lawyer group sent me garnishment of wages for someone who purchased a Range Rover. Not only did I not employ the person, the law group was using a scatter gun concept for the company name trying to effect collection of the debt and my company name was close. Problem was they were trying to serve the garnishment on another company with a similar name variation in another state completely across the country. In a down economy debt collection is the new business. With the advent of “stand your ground” laws process servers are now cannon fodder.

      • BHKH3433

        If they call and ask if they are speaking to “You,” and you ask who’s calling? They will say, “This is so and so company on a personal business matter, are you “Your Name?” Ask “what is this in regards to?” They will say, “Personal business matter between “YOU” and them.” At this point they will ask you again, “Is this “Your Name?” (Repeat after me,) “I don’t know who you are, or what you want but I don’t give out my name, any personal information, or anyone else’s for that matter without knowing what this is about.” By law, they can’t tell you unless they know for sure it’s you who they are speaking with…since it’s a personal business matter between them and you. Also, if they send you a notice in the mail, pretend like you never got it. Unless you get a summons to court, don’t worry about it, and even then, there are things such as statute of limitation for you state that say that after so long, they can’t collect the debt anyway. If you speak to them on the phone and say, “Yes, this is your name,” that is where the statute of limitations starts. You want statute of limitations to start with the company, not the collection agency. If you get a call from a company or number you don’t recognize, send it to voicemail. If it’s an important call, they’ll leave a message. If not, you won’t be bothered with them, oh and one more thing. Check around because I’ve seen statements that if they bought your debt, and try to say that they work for your original creditor, but actually don’t, you shouldn’t owe them that debt. You never agreed with them for services. They never provided you any services, and you don’t have a contract for any services that you’ve received from them. In other words, they are trying to collect a debt for services they never gave you.

        • BeeKaaay

          ” If you speak to them on the phone and say, “Yes, this is your name,” that is where the statute of limitations starts.”


          The statute of limitation starts at the time the debt is first incurred, or the last payment you made on it, whichever is later.

          If you agree to make a payment (they will record this on the phone) – that restarts the statute of limitations.

          Merely speaking to them does not affect the statute of limitation . Just don’t agree to make any payments or make any payments, and the statute of limitations is your shield against the debt.

          • Kenny

            People need to understand the SOL is an affirmative defense, it will not stop creditors from suing and getting default judgments. You will need to answer the lawsuit (yes you can do it without a lawyer).

        • Brian Skinner

          Great advice!

        • sherry

          You are giving some pretty crappy advise. My medical facility uses a collection . Do you know what they do with folks like you? They file a lawsuit. that judgement is good for 20 years. Got a house. Then you have a lien. Go ahead. File bankruptcy. The lien is still on your house. If you sell, you will pay, not only the original debt, but all the accumulated interest.
          Now if you weren’t such a jerk, the agency would work with you because I don’t have the resources to call you every week. You work. You like getting paid, right? So does your medical provider. Can’t pay? We understand. We will even try to up with some resources to help you. IF you start with the truth.

      • Gerri Detweiler

        Mama Moon – Since she is current on her payments, trying to go the debt settlement route it not ideal. In order to settle she would have to stop paying – creditors don’t settle debts that are current.

        How is her credit score? I’d suggest she get her free credit score (checking it won’t hurt her credit). If she qualifies, a lower rate personal loan may be a good option for her.

        If she can’t qualify for a lower rate personal loan then the next option would be to talk with a credit counseling agency to see if they can help her get those high interest rates down.

        This article should help: 5 Tips for Consolidating Credit Card Debt

      • Gerri Detweiler

        I agree on the second point though I would suggest reading IRS publication 4681 rather than relying on the IRS for that advice. As to the first issue, the IRS reports over 5 million of these forms were filed, so I think consumers need to be prepared for it.

      • ron west

        I have never seen so many people comment on something they obviously know soooo little about… for instance, “After a “reasonable” time frame (60-120 days delinquent) they will sell the rights to your debt to an outside company”. No one is selling 60 day paper. Another lost soul says, “At some point the creditor will generate a 1099C and attach to state tax refunds”. A creditor would have to sue you first to attach anything. You won’t get a 1099 unless you settle an account for less than the full balance and “save” more than 599.00 and there are circumstances were you still won’t have a tax liability. Another said “most debt collectors used unethical ways”. That couldn’t be further from the truth. MOST collectors are more polite than customer service reps. They are even trained not to refer to people who they call as “debtors”. They are trained to call them consumers or customers. Another loon says, “statute of limitation for you state that say that after so long, they can’t collect the debt anyway.” The only thing that the SOL means is that if they do sue you you can show up in court and present an affirmative defense that the debt is beyond the SOL. If you don’t show up they can get a judgment. (As I am typing this laws are being talked about under the guidance of the CFPB to change this so that they can’t even start legal action if the SOL has past). They can call you and write you forever even after the statute has run out. There are sooo many things wrong with these posts that I could write a book, One of the few valid posts here was the person that said “people don’t know their rights.” Nothing truer was ever said.

        • Credit Experts

          Thanks for the comment – we try to address incorrect comments as we see them. All the information in the article is correct, and our experts reply to specific commenters with the facts as well.

        • redbloodedamerican

          When you move to America, and deal with these people, yourself, you will understand. Bless your heart.

        • querywoman

          I don’t find debt collectors courteous at all. However, you are mostly correct. I can’t believe people who post paranoid stuff on debt collection blogs who could use their time and fingers instead to research the laws online.

      • Martin Gray

        Better yet, you can turn the tables on them. The Federal Debt Collection Practices Act allows any consumer to file a federal lawsuit against a debt collector alleging among other things, harassment. You can collect from them up to $1,000. in statutory damage, as well as actual damages plus court ordered payment of your attorney fees if you have one. In addition they have to pay their own attorney. If you notify them in advance that you plan to do this they will drop your their case against you. I have already collected from 3 debt collectors and have been written about in a major publication.

      • FactOfOpinion

        As said, document all contact from
        them and keep a phone # log with time & date stamp not hard to do these

        Have them Provide and Validate all
        the following information per the;

        Fair Debt Collection Practices Act, 15 USC 1692g, Sec 809(b) that your claim is
        being disputed and validation is being requested.

        1. What the money you say I owe for:

        2. Explain and show me how you calculated what you say I owe;

        3. Provide me with any and all copies of any papers that show I agreed to pay
        what you say I owe;

        4. Provide a verification or copy of any judgment if applicable;

        5. Provide verification of the date of default and last payment made;

        6. Identify the original owner;

        7. Prove the statue of limitation has not expired on this account;

        8. Show me that you are licensed to collect in this state;

        9. Provide a copy of your agreement and/or contract amount with the original
        creditor to collect

        this debt;

        10. Provide me with your license number and Registered Agent;

        Don’t be intimidated just make them comply with the law!

        Give them 30 days and demand they
        only contact you through the mail.

        If you’ve been served show for court and request a continuance, then file a
        responsive pleading countering each and everyone of the claims and require them
        to provide proof of each demand made. They will probably move to dismiss
        without prejudice because they are unable to provide for the courts the
        required validation information that is demanded in your Responsive Pleading.

        NOTE* They paid very little for these accounts and they hope for a default judgment.
        That’s how they make their real $. You do also have the right to sue them,
        document the harassment.

        You’ll be fine

        Also, If a creditor other than the federal government
        tries to garnish your Social Security benefits, inform them that such an action
        violates Section 207 of the Social Security
        Act (42 U.S.C. 407)

        • Edie Gutierrez

          How does this apply to credit cards when it is not one item or service?

      • Gerri Detweiler

        Have you asked the hospital about whether you qualify for financial assistance? That might bring it down some though it probably won’t eliminate them. The other alternative is to talk with a consumer bankruptcy attorney and consider going that route again.

      • Credit Experts

        First, try filing a complaint with the Consumer Financial Protection Bureau. We’re looking into some other ways to help as well.

      • TiredOfWhiners60

        At the end of last year and Jan I had 4 late payments on credit card. I tried sending a letter telling them I was a good customer up until my hardship and since the final late payment I have made all payments on time. I asked as a one time “goodwill guesture” if they would consider reporting the late payments as on time. The responded that it was against the law, they have to report accurately. I worked for GE credit for a short time and they would allow us to do a good will adjustment. Is it indeed against the law?

        • TiredOfWhiners60

          It bother’s me that they won’t. I am a good customer that had a bad streak and made up for it. They could see I always made on time payments other than the four and have been on time since then for 8 months. It’s Fingerhut, I’ve always heard they had terrible customer service but never seen it till now.

      • Teresa

        I could not agree with your empathetic nature more Scott! I abhor collection agencies… collector is supposed to be human or nice even! That is the reason I never ever made a good collector!! I believe that people get into situations and I have been at both ends of the spectrum – collecting and being collected on…..It was one of the hardest jobs I have ever done…..draining trying to get people to do something they either don’t want to or can’t! I used to call on defaulted student loans to get them forgiven thru disability, incarceration or death…..ugh. I am and always have been “customer service” oriented! I was told Not to tell the debtors “happy birthday” or ask how their day was going or how were they feeling….remember these people were disabled at least most of them and I felt bad harassing them about paperwork to get the debt discharged/forgiven for them even though it was in their best interest! CRAZY……I now am trying to maintain my credit and be as debt free as possible as I and my other half are not getting any younger… and learn! I hope you found a more appreciative job…..Teresa

      • Glenn

        Hello. I have a mortgage with B of A and is currently in court in the State of Hawaii. Since the lawyers have asked the court to re-schedule the hearings for more than a year now, the foreclosure is delayed which continues to lower my credit score. Is there a better way to notify the 3 credit bureau or possibly B of A to put a note so that my credit can improve until the settlement is finalized? Thank you.

        • Gerri Detweiler

          Unfortunately, I don’t know what could be reported that would help. Foreclosures are reported for seven years from the date the foreclosure was filed so I don’t think the delay should affect that reporting period.

      • Cblake

        Thank you for the reply. I did report it to the Consumer Financial Protection Bureau as well as the Better Business Bureau. Both of these moves did generate phone calls from the mortgage company, only to basically be told “sorry about your luck”. Yeah, one of the lovely gentlemen I spoke with at NATIONSTAR MORTGAGE even told me that I should have had “better communication with my ex-husband” so that I would know what was going on with a “loan that my name was on”. Really? How many times a day do YOU call YOUR EX???? Geesh. It doesn’t look like they are willing to make any sort of “good will” gestures on my behalf and all it did was make my blood pressure go dangerously high as I wanted to crawl through the phone and, well, you know. It is SOME comfort to know my score will recover somewhat quickly, if I can keep the ex-husband from screwing up anymore. I am still at risk, since he has screwed up his own credit and is not eligible for refinance in order to remove my name completely from his life. Any recommendations from that end? I have set up automatic notifications for when a payment is made on the primary mortgage, so at least I do know that it is getting paid. Would love to remove myself from the risk altogether for peace of mind.

      • Gerri Detweiler


        We moderate this blog during normal business hours. Is there something we can still help you with?

      • Credit Experts

        Not very good, but it doesn’t hurt to ask. Disputes are for removing information that is inaccurate. A creditor is not obligated to remove accurate information.

      • susan

        Number 7 says once it goes to a collection you have no choice. Not true. I have had bills pulled from collection once I explained what happened to the original biller. And iam grateful when they do.

      • Michael Bovee

        The SOL to sue for a debt like this is 4 years in California. And the calls to your kids and boyfriend when they are already talking to you are a big problem… for them.

        Call and have a no cost consult with an experienced consumer law attorney whose practice focuses on debt collection violations. You will find many listed for California at

        Consider the advise you get, and proceed from there.

      • TiredOfWhiners60

        If you haven’t settled yet, make that part of your negotiation. Tell them you would like it removed from all three credit bureaus. If you have paid it then you are at their mercy. You can write them and ask them if they would consider removing it as a goodwill gesture since you did pay them. Won’t cost anything but a stamp.

      • True

        This article is correct. Document your efforts to resolve the debt.

        “Deal with Creditors, Not Collectors’ I tried that with Tenet Corp. That’s an umbrella corp that turn hospitals into for profits businesses. Following their procedure I wrote a letter of protest about a $400- bill for a 30 minute meeting with a dietician. 60 days later I get a call from a collection agency which is also owned by Tenet. Their business plan is to redefine a medical center that included 1 building as real hospital as all 6 buildings are a hospital. Gouge the patients and immediately turn them over to collections (a separate but wholly owned company). Beware for profit hospitals.

        • Gerri Detweiler

          I hope you will also share your experiences with the Consumer Financial Protection Bureau.

          • querywoman

            In the late 1980s, I had the old type of insurance with a $200 deductible and 80% reimbursement after that.
            I spent three days in the hospital. When I got a bill from a collection agency, I asked the hospital for an itemized bill.
            I saw all kinds of stuff on it, like charging me for three needles to put an IV in. It wasn’t my fault they broke two needles on me, and I protested.
            I can’t remember all the protests, but I never heard another word.
            I don’t know if it’s that easy to pick a medical bill apart in these days of managed care.
            Beware of private hospitals? In my experience, the public hospitals overbill even more. They’ll take money anywhere they can get it.
            Most hospital bills are paid at much less than the bill you get. What I want to know is if they get to write off the overbilled amounts.

        • querywoman

          Tenet and other hospitals are like billing machines. They turn over a lot of bills automatically. They will often ignore your requests. When it goes to a collection agency is the time to start invoking laws, demanding verification of the debt, etc.
          The agency has a ton of stuff to collect, and should comply with the few people who invoke laws by writing certified letters. It’s fairly easy to get a collection agency in trouble for not complying with the laws.

      • Gerri Detweiler

        You’re right; there are often options for students with federal student loans to reduce payments and get into an affordable payment plan. Unfortunately, the same programs don’t exist for most private loans.

      • Gerri Detweiler

        Unfortunately it is simply not true that medical collections don’t affect your credit as much as non-medical collections. Under most credit scoring models used by lenders, insurers etc today, there i is no distinction made for medical collections. That will change if and when FICO 9 is widely adopted. (VantageScore 3 also ignores paid collections): Why You Shouldn’t Get Too Excited About the New FICO Score… Yet

        • querywoman

          I have known of apartments and mortgage companies who disregard medical debts. That may be something that has to be explained.
          I have had horrid credit in the past, due to unemployment and illness. Most of my charge offs fell off years ago.
          I have been rebuilding my credit. In the past two years I was in the hospital twice. It’s on my credit report, but I recently opened some new retail credit cards.
          This is Texas, the biggest debtor’s paradise. The writer is in Florida, the second most lenient state for debtors. She needs to check her state law to see what, if anything, could happen to her over unpaid medical debt. In Texas, we can’t get our wages garnished for medical debt.
          Another bankruptcy would her credit more than unpaid medical debt.
          As another major issue here, when I research medical debt online, I see people in other states getting wages garnished over medical debt, like a very low wage earner getting her wages garnished over a miscarriage. Texas has the least generous of social benefits in the country, yet Medicaid, per federal law, covers miscarriages and other pregnancy-related expenses for low income women to middle income women in Texas. Medicaid is more generous in other states.
          Hospitals often do not advise people of Medicaid and other payment assistance programs.
          Having certified people for Medicaid, I know that hospitals and their collection agencies will nag and nag people to apply for Medicaid. Sometimes they might forget.
          Medicaid doesn’t pay as much as they want, but it’s something.

      • AB

        Law firms, collection agencies, ETC. should be required to add only the true cost of collecting the debt to the balance owed. They shouldn’t be allowed to inflate these costs.

      • HelenRae

        Check this problem I had out:
        “Under observation” huge bills because I was never admitted from ER! Hello, my family did not know this at the time since I was moved to another floor in a room as monitored as ICU. I had a heart attack! I had a heart cath done etc etc. I was on vacation so my husband and son and my sister drove for 6 hrs to get to me. I also was told when I received one Bill from a doctor, that he was out of network! The hospital was in network. Do you ask those questions when you have a heart attack? We worked through some of it over a years time, many phone calls and letters. Yes, they also tried sending one Bill to collection, my credit score is 810. We were making payments! I could go on longer but that is enough to give you my point of view…thousands of dollars! I found out about “under observation” on a national newscast months later and realized our problem

      • Credit Experts

        Student loans are not dischargeable in bankruptcy, unfortunately. This post may help explain it. Can a Debt Collector Come After My Social Security?

        • querywoman

          I did some recent research and saw that many times they are discharged in bankruptcy, but often creditors don’t ask to discharge them. The determination is usually based on if a debtor would have trouble repaying the loan on current income within a reasonable time.

          • Credit Experts

            Thank you — and you are right; we should have said they are rarely dischargeable in bankruptcy. We wrote about it here:
            Can You Get Your Student Loans Forgiven in Bankruptcy?

            • querywoman

              Glad you acknowledged me! It appears that debtors are not asking to discharging their student loans often in bankruptcy.
              Their lawyers should be advising them to try.
              If the courts decide the debtors will have extreme difficulty, effectively impossibility, the court might allow student loan discharge.
              This would probably allow the debtor to get another student loan, but a large one after bankruptcy would not be advisable unless the education will strongly be predicted to increase income.

      • Gerri Detweiler

        Student loans are different. Please read this article: My Social Security Income Is Being Zapped for Student Loans!. If you still have questions, feel free to post them there.

      • LMorantine

        I have close to $9000 in credit card debt which includes Rise Credit ($2000) and Speedy Cash ($600) I went through Family Credit debt management but was unable to make the payments of $175.00 every 2 weeks. Rise and speedy both wanted a very large amount every 2 weeks, but the other credit card companies through the debt management were very reasonable. Now that I’ve messed up the Debt management arrangement, I am wondering if I can contact my creditors now before accounts go to collection to work out a payment plan. My income is very low, I’m struggling to pay rent, utilities and buy food. I have already filed chapter 7 which was discharged in 2012 so I can’t go that route. Any advice would be appreciated.

        • Credit Experts

          You can certainly try.

        • querywoman

          Those agencies that supposedly help you negotiate with credit often want too much. Plus, you cannot trust them to send your payments to the creditors.
          It’s best to negotiate directly with your creditors.
          At first, the creditors probably will not work with you. After 60 or 90 days, they become more willing to work with you.
          By law, unpaid debt is charged off after 6 months. Charge offs on your credit report hit you harder, but they can be negotiated also.
          When a creditor hires a collection agency, you can assume the agency will take half of collections and give the other half to the original creditor. Therefore, you can try to negotiate directly with the original creditor to just pay half of the balance.
          What will happen if you cannot pay at all is governed by state law.

        • sherry

          LMorantin there are agencies who will help you with resolving debt. The reputable ones do not charge you a fee. They are privately funded (like United Way). Before signing on with anyone, check with your local BBB.
          As for bankruptcy, you may be able to do a Chapter 13 reorganization. That is a 5 year pay off, with monthly pyaments to the court. It is not fun. You are left with very little money of your own.

      • LMorantine

        Another question I have is, because I have no checking account anymore which was they way I usually paid my bills online, will the credit card companies accept money orders through the mail as payment? I have a reloadable debit card and I don’t want to use that with automatic payments coming out of it because that has left me short in the past, unable to pay rent or have enough food to survive. I’m on my own, no other income, no family that is willing to help me. I want to resolve my debt and after the debt management plan not working out because I couldn’t make the payments, I realize I have to b realistic in how I can pay this back, and still be able to survive as I’m doing it.
        Thanks in advance for your help.

      • Credit Experts

        Very unlikely, and at this point it cannot appear on your credit reports, though you should check them. (Here’s how to get your free annual credit reports.) Here are a couple of other resources you might find useful:
        Statute of Limitations On Debt Collection by State
        Does Your Old Debt Have an Expiration Date?

      • querywoman

        If her Social Security is disability, not age-related, she might get a doctor to fill out a paper for a disability forgiveness.
        Failing that, she might be able to “redeem” her student loan by making an agreed payment, maybe as low as ten dollars, for 6 to 12 months.
        The above applies only to government student loans, not private bank ones. A 40 year old student loan is probably a government loan.

      • dumb hick

        If a bank charges a debt off.
        Sends you a 1099 form
        can they try to still get debt paid
        or sell the debt to collector

        • Gerri Detweiler

          Maybe. The IRS says that a 1099-C doesn’t necessarily mean the debt isn’t owed. But my understanding is that some consumer law attorneys have challenged collection on a debt after the 1099-c was issued.

      • Gerri Detweiler

        This is a great question. We turned it into an article: How Do I Get a Debt Collector to Negotiate With Me? Hope it helps!

      • BrownTaurus

        I also defaulted on my student loans and was sent to collections and never gotten my tax returns seized or wages garnish and now its gone from my credit report.

      • sstout

        The collection agency didnt garnish her ssi.. the federal government did. ..its called treasury offset… its when you owe money on federal loans and there are no statue of limitations

      • Muscle man

        You are correct. They take a gamble and most of the time their gamble doesn’t pay off.

      • joescan54

        One time, when I was really behind on credit cards, a collector was hounding me with “You better pay me or else.” I didn’t know what to do, so I just gave in, “Or else, what?” There was silence on the line, then he hung up. An hour later a very nice pleasant woman called and asked if she could work out a payment plan for me.

      • gwen

        I had a well paying job as a temp. but got fired due to technology…all my credit cards has been consolidated onto one card and I was making payment on that one card… well after being out of work for 2.5 yrs I had to stop making payment, the bank sent me a settlement letter but I ignored it and it then went into collection, 2 agencies had it and call but I told them I was out of work but the 3rd agency that got it took me to court, by me not filing and understanding how all that court stuff worked they were able to get a judgement against me because of my lack of knowledge… Now they are garnishing my wages… is there something I can do to stop this and get another court date?

        • Gerri Detweiler

          One of our contributors just wrote this comprehensive article about judgments:
          I Found a Judgment on My Credit Report. Now What?

          My suggestion is your next step is to talk with a consumer bankruptcy attorney. It may turn out that filing is your best option for dealing with this debt you can’t pay, but if not, they can tell you what your prospects are for getting the judgment vacated or modified.

      • Goldron

        I see that some of the issues people have with debt collectors is that they are not nice .WHAT DO YOU EXPECT IF YOU DO NOT PAY.If you would stop being a loser & a thief & pay the money you owe everyone would be nice.I give credit all the time & some clients make up every excuse in the world not to pay ,in essence they are just irresponsible losers & thieves who will come up with every excuse in the world not to pay.You take a loan ,you have to calculate in your mind how your monthly payments will be .Do not blame the collector.You do realize that by going bankrupt in essence you are a thief ,just a legal one.

        • Credit Experts

          Goldron —
          Please keep conversations civil and on point. First, some people are unable to pay through no fault of their own — things like job loss, medical expenses, etc. (In fact, most bankruptcies are related to medical bills.) Second, some collectors break laws, and they should be reported for doing so. Finally, some of the calls from “debt collectors” are instead from impostors. Using scare tactics and making unlawful threats are unacceptable regardless of why someone isn’t repaying a debt on time.

        • TiredOfWhiners60

          I always wondered what a debt collector thinks they will get by harassing, yelling and/or being rude. If it were me they were doing this to, they would get hung up on and I would never answer their call again. No money in that. Empathize and be nice and you may make a payment arrangement with the ‘victim’.

      • TERESA


        • TiredOfWhiners60

          You are indeed rare. I have never dealt with anyone from your company in the past. I have NEVER spoken with a polite debt collector. I hope more companies follow the example. I believe you get more flies with honey…as the old saying goes.

      • julie

        5 years ago I went to the er via ambulance. At that time I provided all my info including insurance information. One year later I received a threat from the ambulance company that my account was going to be sent to a collection agency. I immediately called my insurance company where I learned that the ambulance company had never billed. I contacted via phone as well as a follow up letter providing again my insurance info. 4 years from then I have received multiple threatening phone calls from the collection agency as well as correspondences. My insurance company states they were never billed, and now the statue is up for filing a claim. What should I do?

        • Gerri Detweiler

          Have you checked whether the statute of limitations has expired? That may be the easiest way to deal with it at this point.

          Unfortunately unless you are in Texas, where there is a very pro-consumer law regarding timely medical billing, (or other states with similar laws, unfortunately I don’t know what they are) you may be on the hook for the procedure since you received the service. However, it is also possible that the provider’s contract with your insurance (if it was “in network”) prohibits “balance billing” or billing you for amounts beyond the amount you would have had to pay out of pocket if insurance had been properly billed.

          Unfortunately, dealing with it at this late date can be problematic. You’ll need to try to research state law and/or get a consumer law attorney involved. You could try filing a complaint with the CFPB which regulates many debt collectors and is looking into medical billing issues on credit reports.

      • Brian Skinner

        You already know how it works/ Also if you have a CC and owe 15K on it abd do not pay, they will send you a 1099 as income. You must pay taxes on that money. Trust me, been there.

      • Brian Skinner

        Thanks for the info.

      • Brian Skinner

        Ask a lawyer how to file a motion to “Vacate the Verdict” because of NO SERVICE. Have done this myself and it is easy.

        • Gerri Detweiler

          Very interesting – would like to hear more. Where did you do this and how did you do it?

        • So_What

          Great advice! I will.
          Thank you.

      • Brian Skinner

        I didn’t know that once they issue the 1099 it’s over! Thank you so much!!!

      • LeftyG

        seriously tell them to pound sand (if they call you). if you get it in writing, wait until day 29, and mail them, say i don’t owe this, and tell them to prove it. repeat until they flinch. they can no longer attempt collections if they do not respond within the specified time frame. not they or the descendant debt collectors can continue the charade. also recall that if it is legit, and they buy it for 10 cents on the dollar, they can not pursue you for the other 90 cents on the buck.

      • daboccikidd

        I am on Permanent Disability/SSD. I had an apartment in Fla. for less than a year. I now live in NC. I was evicted because of failing to pay rent. They never even sent me a letter to discuss this debt, which I fully acknowledge. Within 30 days, I had a collection agency calling and wanting to set up a payment arrangement. I don’t even know what the original debt was and the collector told me that they bought the debt it’s their debt now and they aren’t required to give me that info. I would have been willing to work with the apartment complex but they didn’t even give me a chance. My credit is so bad already that some places won’t take my cash. Can the court order my disability check garnished? If not, can they freeze my bank account once my check has been deposited?

        • Gerri Detweiler

          You are allowed to request validation of the debt from the collector and they are required to provide it. I am not sure exactly what you’re looking for and why they are refusing but it sounds problematic. You may want to file a complaint with the CFPB and/or talk with a consumer law attorney about that. As far as your disability income goes, this article may help: New Federal Rule Protects Benefits from Garnishment.

      • Joe Catalano

        I’m going to let everyone in on a secret. You can FIRE THEM!!!!! Send them a registered letter stating that the debt is in dispute, is to be returned to the original creditor and their services are no longer required in this matter. State that any further attempts to collect will be considered harassment and be reported.
        I have done this numerous times, they will not contact you again. Most likely they will resell the debt to another collector who you do the same thing with until the statute of limitations runs out. IT’S THAT EASY.

      • Barry Charnay

        At one point the companies that were buying old accounts were even buying those that were protected by bankruptcy. However, there’s an interesting point to that (this was when Chapter 10 was still available to the individual); fortunately they did warn us, but I know people didn’t listen. If, when they demanded payment for that debt (any debt protected by the bankruptcy, which means any debt named in the bankruptcy declaration and declared valid), you paid as much as one penny…
        PAYMENT OF ONE PENNY ON A DEBT THAT HAS BEEN DECLARED CLOSED makes the whole debt valid again, WITH, IN SOME CASES, and I didn’t understand what the variables were INTEREST.

        Ouch. Yes, I wanted people to have to struggle to read it. More impact.

      • Barry Charnay

        Student loan debt is never, ever forgiven. That’s a federal debt. The only possible solution is exactly the one that’s advertised on television and that’s exactly what I know about it. I would be very careful using an internet search engine on that one, by the way, because there are a million scams out there; seen them myself, and I don’t have any debt.

        • Snark Jacobs

          This is incorrect.

          • Barry Charnay

            There is now one federal program for which a tiny fraction qualify. However–I’m sure you know better. Kindly explain to me so I can explain to someone how to step out of her student debts.

      • sherry

        I would dispute with all three credit reporting agencies. I would also write the attorney general in your state and copy the bank. This is rediculous

      • Michelle Johnson

        @scottwise, i tried to do half a bill with the law office and they countered it. I have to go to court soon what should i do. I was going to go to court but will I be worst off.

      • unknown

        Here are two tips that will help you beat debt collectors. One, have someone else answer your phone and have them tell the collector that you are deceased. That stops all further calls and the notation puts an end to further collection efforts. Try it, it works. Second, if you live in a state like California, they cannot record the call and then tell you that the call is being recorded. You can sue them for doing that. Lastly, never ever make a payment after you are in default. That starts the statute of limitations clock all over again. Wait it out. 3-5 years. That’s why the death notice works so well. It gets them off your back and then the SOL expires. Game over.

      • J B

        My mom is dealing with a creditor, I don’t have bad credit but she was making payments to pay her creditor back, I found a credible site in Virginia where it said that places like Virginia can only garnish five percent of your retirement to pay back your creditors, my mom was paying all her creditors back at 1% interest, she had over 13 people she had to pay back, but one of the companies she already made payments with through an automatic payment plan stopped drawing payments on her account, they say they had an arrangement but it changed. They were trying to push my mom like a cop does to plead guilty so the punishment was harsher and her plan would change. Are they allowed to harass you if you already made payment arrangements and they don’t take the money. I think that would be illegal right. I know it says to get it written out, but they record everything so I think her voice recording would be enough in court, testifying she was willing to make the amount and she did and them admitting they stopped the payments. They said she was suppose to pay more over time, and that she said that on the phone, but my mom doesn’t recall it. I know if she did say she would pay more she would be in the wrong. But if they stop taking payments that is on the creditors right, because she already worked out a deal they just decided they wanted more. Is their a way of going after a creditor if he decides he no longer wants to accept your payments and he is in the wrong for not taking the payments like planned. Because the creditor is now calling are house twice a day and he called my moms phone this Sunday morning before church and I told him to fuck off. I know I can find shit on my own, I do well with Google, but I just wanted someone else’s opinion that’s been through this on this.

        • Gerri Detweiler

          Has your mom talked with a consumer protection attorney? It really sounds like that would be a wise next step (perhaps you can make the appointment or call with her to help her understand her rights?)

          As for your question about changing the payment arrangements; the law isn’t specific about that so it would likely be a matter of case law. We touched on that here: Can I Pay a Creditor Less Than I Owe?. (Read the part about implied contracts.)

      • j

        What about a debt that was generated by a previous spouse (on which that spouse paid for a short time and then stopped making payments) all without the knowledge of the other spouse? The divorce decree specified that each party was to be responsible for his/her own debts. Then, months after the decree, the divorced husband is notified of an obligation generated by his former wife to which she forged his signature and provided his social security number. The former wife signed the contract six years earlier and now a collection agency is dunning the divorced husband for payment plus late fees, etc. He does not have a current address for the former wife. After the divorce (he was husband #3), he learned of her track record in generating bad debts, writing hot checks, etc., with husbands #1 and 2. Since the amount in question is sizable, can anyone offer advice without his having to secure an attorney and pay more legal fees to extricate him from this situation that has done a number on his previous excellent credit rating?

        • Gerri Detweiler

          If his ex forged his signature then it’s fraud and he may want to proceed as such. If he needs more guidance, there is some helpful assistance available for free from the Identity Theft Resource Center.

      • Ned

        Can I send a validation letter to the creditor before they send me to collections? I have proof what they did was fraud, and of course are just telling me “sorry, you have to pay it.” I have had this happened and resolved in the past.

        • Gerri Detweiler

          How about filing a complaint with the Consumer Financial Protection Bureau? Maybe that will head it off…

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