Start My Answer

Will Collection Agencies Settle for Less?

Sarah Edwards | November 18, 2022

Trying to reach a settlement with a debt collector is like ^^

Summary: Most debt collection agencies are willing to settle a debt for less than the original amount. 95% of consumers who work with a debt settlement company save money in the end. So, settling your debt is definitely worth it. To reach a debt settlement, follow these steps: respond to your lawsuit in court, make a settlement offer, and get the settlement agreement in writing. With SoloSettle, you can settle your debt on your own.

Do you wince every time the phone rings? Outstanding debts are stressful enough without the addition of persistent debt collectors.

The best way to free yourself of this burden is to settle your debt as quickly as possible. But what if you don’t have the money to pay your debt in full? Will collection agencies settle for less? The answer, surprisingly, is yes.

Here’s how you can settle your debt quickly and affordably and rid yourself of the annoyance of unwanted debt collection calls.

Will collection agencies accept a lower payment?

In many cases, it’s in the collection agency’s best interests to accept a lower payment. Remember: the collection agency isn’t the company you originally owed money to. Instead, your original debtor sold your debt to a collection agency, which then set about attempting to reclaim the debt.

Your debt collector may therefore be willing to accept a lower payment if it means getting their money faster. On average, consumers have been able to settle their debts for 50% less than the original amount.

However, this isn’t a guarantee. While some debt collectors may work with you, others might insist that you pay the full amount. And even the collection agencies that show leniency may vary in terms of how low they’re willing to go.

Still, it never hurts to try to reach a settlement — 95% of consumers who work with a debt settlement program end up saving money, even after paying associated fees.

Will settling debt affect my credit score?

Even if you settle for a lower amount, settling your debt will still lower your credit score.

Generally speaking, paying off your debt is better for your credit. When credit bureaus examine your financial history, they prefer to see the words “paid in full” on your debts. In other words, paying off your outstanding debts can minimize the financial damage they cause.

Even so, settling your debt is better for your credit than not paying it at all. Settling quickly can also put you back on track toward rebuilding your credit.

Follow these steps to settle a debt

You can settle your debt by completing three basic steps.

1. File your Answer

If you’ve been hit with a lawsuit, you’ll need to respond by submitting an Answer to the court and the debt collection agency. Failure to do so can result in a default judgment, leaving you on the hook for the full amount.

Even if you’ve already settled, you’ll want to file an Answer anyway to prevent unscrupulous debt collectors from requesting a default judgment.

Act fast. You have to file your Answer before your state’s deadline or you’ll lose automatically. If you’re unsure how to compose your Answer, SoloSuit has got you covered.

You can draft and file a customizable Answer document in just 15 minutes online with SoloSuit. To learn more, check out this video:

Respond with SoloSuit

Get Started

2. Make a settlement offer

Next, you’ll need to determine the maximum amount of money you can pay for a settlement. Then, make an offer to the debt collector based on that amount.

For instance, if you owe a debt of $7,500 and can afford to pay off $6,000, you can start negotiations at a lower offer to give yourself room to grow. To submit your offer, simply use the following prompt:

“I, [your full name], am offering a lump-sum payment of $[amount] to settle the case with case number [case number]. You can accept or counteroffer. If you accept, respond to this email with only ‘Accept.’ If you want to counteroffer, respond to this email with only ‘Counteroffer: [offer].’

Please do not contact me in any other way than responding to this email. I'm prepared to litigate this matter and win in court. I'm also prepared to file an FDCPA complaint. This offer expires in 6 days on [date]. The agreed amount will be paid within 90 days of the date of settlement.

Don’t be surprised if you go through a few rounds of correspondence with the collector or attorney. As long as you explain your circumstances thoroughly, they may be willing to settle to avoid a protracted legal battle.

SoloSettle can help you start the settlement negotiation process on your own.

3. Get a settlement agreement in writing

Always save your correspondence with debt collectors and their attorneys. Once you reach a settlement, request the terms of the agreement in writing. Having a record of the arrangement will prevent the collector from going back on their word.

Only send your settlement payment once you have this agreement in hand. Going through an agency or using special software can help you make a payment while protecting your personal financial information.

Now, let’s take a look at an example.

Example: Trevor is being sued for a $1,000 debt. He has enough money to pay off $800 upfront. Trevor uses SoloSettle to send an initial offer of $600 to the debt collector. After a few rounds of negotiations, a settlement of $750 is reached. SoloSettle sends over the lump-sum payment on Trevor’s behalf, preventing the debt collectors from having any of Trevor’s financial information, and manages the settlement agreement document for him. Having settled his debt, Trevor feels ready to move forward with a better financial future.


Debt settlement has real value

In 2018 alone, debt settlement companies settled $4.5 billion in consumer debt, with an average of 55% debt reduction per person. Not only does it pay to settle your debt, but it allows you to move forward without being hounded by collectors.

Settle your debt with SoloSettle, and save yourself the money, time, and stress of dealing with debt collectors.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.



Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.


We have answers

Join our community of over 40,000 people.


You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.


Get Started

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendants Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouses Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

Youre Drowning in Debt — Heres How to Swim

Help! Im Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Heres What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review

Do Debt Collectors Ever Give Up?

Can They Garnish Your Wages for Credit Card Debt?

How Often Do Credit Card Companies Sue for Non-Payment?

How Long Does a Judgement Last?

​​How Long Before a Creditor Can Garnish Wages?

How to Beat a Bill Collector in Court

Not sued yet?

Use our Debt Validation Letter.


Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.


Let's Do It

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



Get Started