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How to Negotiate with Debt Collectors

Sarah Edwards | April 23, 2024

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: To negotiate with debt collectors, verify the debt, make a fair initial offer, be prepared for counteroffers, and document your agreement in writing. SoloSuit can help you verify your debt, respond to legal challenges, and complete the negotiation process to get you out of debt.

Debt collection phone calls may be an annoyance, but you should never ignore them. If a debt collector has contacted you, it’s because they’re trying to collect a debt on behalf of one of your past or current creditors.

Ignoring the debt collector can make things worse, and you may even face a debt collection lawsuit. Luckily, it’s typically easier to negotiate with debt collectors as opposed to negotiating with the original creditor because they’ve often purchased your debt portfolio at a fraction of the original debt amount owed. This means that, if you offer to pay a portion of the debt to settle for less, the debt collector will still make a profit.

With this information in mind, let’s explore some tips on how to negotiate with debt collectors for a lower settlement so you can resolve your debt once and for all.

But first, you should know how to respond to debt collectors as soon as they contact you.

Negotiate with debt collectors.

Have you been sued for debt? You can still negotiate a settlement with debt collectors. SoloSettle makes it easy.

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Before you negotiate: Know how to respond to debt collectors

Before you start negotiating, it’s important to understand how to handle debt collectors. Here are some preliminary steps to take after being contacted by a debt collector.

Report aggressive debt collectors

Every consumer is guarded from assertive debt collection practices by the Fair Debt Collection Practices Act (FDCPA). This prohibits collectors from such practices as calling multiple times per day, threatening you with arrest, or failing to validate your debt.

You can report violations through the FTC online platform or by calling them at 877-382-4357. Additionally, you can report them to the Consumer Financial Protection Bureau (CFPB) using their website or by calling 855-411-2372.

Verify your debt

Are you sure the debt is even yours? Insist that debt collectors identify information that includes:

  • The identity of your original creditor.
  • The amount of the debt.
  • Any payment history and the date of the last payment.
  • Any information that ties you to the debt.

After receiving a debt validation letter, most collectors will back off until they are able to properly validate that the debt is yours. Knowing how to negotiate with medical debt collectors is also important since you’ll need to verify what portion of the debt you’re responsible for as opposed to your health insurance provider.

Send a debt validation letter.

Respond to debt collection lawsuits

In some cases, you may actually be sued over your past debt. If so, you’ll need to act fast. File an Answer with the court to indicate your willingness to fight the lawsuit. Otherwise, the court may render a default judgment in the debt collector’s favor. In some cases, you have as little as two weeks to file an Answer.

Negotiate with debt collectors for a lower settlement

A debt collection settlement is a lump-sum payment that you’ll make to settle your debt once and for all. The goal is to negotiate a lower settlement than you currently owe, which reduces your financial burden and lets you escape your debt, especially credit card debt, quickly so you can move on with your life.

Here are some tips and tricks:

  • Only threaten bankruptcy if you are seriously considering it. Empty threats won’t bid well, and it’s better to be honest with debt collectors when negotiating debt.
  • Be upfront about your financial situation. If you’re dealing with other debts and your income potentially falls short of your obligations, explain why your circumstances are keeping you from paying off the debt. If debt collectors know your situation, they are usually more willing to work with you on a settlement.
  • Highlight unexpected life events that have made it difficult for you to fulfill your financial obligations, such as job loss, health problems, death of a loved one, etc.

Learn more about these tips and tricks in the following video, where we interview an attorney and ask how to negotiate with debt collectors:

Follow these 3 steps to negotiate debt settlement with debt collectors

Now that we’ve covered some basic tactics for negotiating, let’s explore specific steps you can take to negotiate debt settlement with a debt collector.

1. Make a fair offer

Start the negotiation process by submitting a fair offer in writing. But what is a fair offer? We asked an attorney how much to offer to settle debt, and here’s what we learned:

  • Most debts settle for around 40% to 60%. However, it's not uncommon to settle for as low as 10% to 30%, especially if the debt is older or if it's been sold to a debt buyer.
  • Starting with an offer below 50% of the total debt can give you leverage and room to negotiate. Lowball offers less than 20% might not be taken seriously.
  • Settlements with debt collectors might be lower than with original creditors. Debt collectors frequently purchase debts for pennies on the dollar, so they may accept a smaller amount to settle.

Based on these attorney tips, It’s best to offer to pay around 60% of your total debt amount to kickstart negotiations. You can send your offer in writing by saying something like:

“I am writing regarding account number XXX. I am agreeing to pay a lump sum of $_______ to resolve my obligation. If you accept, please respond to this message with only ‘Accept.’ If you wish to submit a counteroffer, please respond only with: ‘Counteroffer: [$____].’ Please refrain from contacting me in any other way. This offer is valid for six days and expires on MM/DD/YY. I will render payment within 90 days of the settlement date.”

Depending on your circumstances, you might explain your circumstances — such as other debts — that prevent you from making a full payment. Just be sure that you are honest and accurate, as debt collectors may have access to your financial records.

2. Be prepared for a counteroffer

Don’t be surprised if debt collection agencies reject your initial offer. They will likely follow up with a counteroffer, which you can accept or reject. The point is to open up negotiations so that you and the debt collector can reach a mutually beneficial solution.

If this process sounds intimidating, you can leverage technology to make it easier. SoloSettle is an innovative platform that empowers you to submit offers, receive counteroffers, and negotiate a lower settlement. But while you’re using SoloSettle, you shouldn’t have to deal directly with debt collectors.

Let’s take a look at how this works when negotiating your debt:

Example: Cameron had been receiving phone calls for weeks from a debt collector. She didn’t have enough to pay the full amount, and she wondered how she was going to manage. She received court documents and learned she was being sued. Thankfully, she had a friend who told her about SoloSuit. She drafted and filed an Answer to the lawsuit with SoloSuit's help and used SoloSettle to submit an initial offer to pay 60% of the total debt. Cameron's debt collector rejected this offer but submitted a counteroffer of 75%. Cameron accepted, paid the debt settlement agreement, and resolved yn her debt for good.


Start negotiating today by using SoloSettle to resolve your debt.

3. Pay the settlement as agreed

Once you reach a settlement, you’re not done until you officially pay off the debt. In many cases, you can resolve the debt as a lump-sum payment, though debt collectors may allow you to tackle large debts through a monthly payment plan.

That’s why it’s essential to agree to a debt resolution strategy that aligns with your personal budget. SoloSettle will facilitate the payment process so that you can have greater confidence that your debt has been resolved. If you've been sued, be sure to file a settlement agreement into your case to avoid further legal issues.

While a debt settlement can still impact your credit score, it’s better than having ongoing debt or declaring bankruptcy. Instead, you can resolve your debt and then work toward improving your credit score through on-time payments and keeping your credit card balance low.

Settle with SoloSettle

Make an Offer

Get on with life

Knowing how to negotiate with medical debt collectors and other agencies can put you back in control of your finances. By using this guide, you’ll be able to get out from under your debt and move on with your life.

To learn more about what the debt collection negotiation process is like, check out this video:

https://www.youtube.com/watch?v=bJqoQP7rR9I&t=6s

FAQs on negotiating with debt collectors

What questions should I ask myself before making a proposal to repay the debt?

Here are some questions to consider before you make a proposal to repay your debt to a collector:

  • How much money do I make each month?
  • How much can I afford to pay each month without falling into more debt?
  • Do I have any family or friends who could lend me some money to use as a lump-sum payment to settle the debt?
  • Did the debt collector purchase my debt from the original creditor?

How should I calculate my debts and document my plans for paying them off?

Here's a great formula to calculate your debts so you can make plans to pay them off:

Amount available to settle = (monthly income – monthly costs) + savings

Let's look at an example. Jill makes $5,000 each month. She usually spends around $4,500 on her mortgage and car payments, gas, groceries, and other expenses. She has $2,300 in savings. Here's how she can calculate how much to settle an outstanding credit card debt:

($5,000 - $4,500) + $2,300 = $2,800

So, in this example, Jill might be able to afford $2,800 to settle her debts in a lump-sum payment. This could help her regroup, resolve the debt, get debt collectors off her back, and start over with her savings and monthly costs.

What are the risks associated with dealing with debt settlement companies?

The biggest risks of working with debt settlement companies are the negative effects it will have on your credit score and the fees of working with them, which are often up to 25% of the debt amount owed.

How can I file a complaint if I have an issue with debt collection?

Federal laws like the Fair Debt Collection Practices Act (FDCPA) protect consumers from unfair collection. If you're having an issue with debt collection, file a complaint with the following organizations:

To learn more, check out our guide on How to File an FDCPA Complaint Against Your Debt Collector and get started on your path to defending your rights.

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

Other wage garnishment resources

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

Other debt settlement resources

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

How to repair and improve your credit score

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt.

How to resolve student loan debt

Struggling with student debt? SoloSuit’s got you covered. Below are resources on handling student loan debt.

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

How-to debt guides

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