If it is a reputable company, they will settle with you. Just be sure you are very firm about the amount you are willing to pay as full settlement. And don't let them tack on a lot of fees or other charges to run up the balance. If they won't negotiate with you, tell them in no uncertain terms that you will make no further payments on the account until a settlement agreement is reached. Your credit will take a hit, but no more than it already has by being turned over to collections. There is something called a "drop dead letter" that you can send to them so that they cannot legally contact you further about the bill. Their only recourse at that point would be to file for a judgment against you, so that if you ever sell any property, the bill would be paid out of the proceeds. The judgment process is long, months, sometimes years, and expensive for them. Most states require that both parties go to arbitration before a judgment hearing can be scheduled, which the collection agency would have to pay for, since they filed for it. It is very rare that a collection agency would be willing to go to that much time and expense to collect a debt that they bought for pennies on the dollar. Should you receive a summons for judgment, you should talk to an attorney, since the laws for arbitration and judgment may be different in your state.
Be sure you get everything in writing and anything you send to them should be sent certified mail and should be signed for. Keep a copy of everything for yourself! Also, VERY IMPORTANT, never give them your checking account, savings account, or other credit card numbers. After an agreement is reached, you will sign a contract for the amount and terms of the settlement and send it, along with a certified check or postal money order, to them by certified mail. If you are going to be dividing the settlement amount into payments, be sure that it is spelled out correctly in the contract. Before the contract is drawn up, tell them that you want to have included in the contract, their agreement to send you a letter stating that the account has been settled in full and has a zero balance and that the account will be reported to the credit bureaus as paid in full with a zero balance. With this information in writing, if you apply for credit during the time that it is still being reported to the credit bureaus, you can show the letter to the potential creditor as proof that the account is paid in full by settlement.
Best wishes...Janna
