Keep in mind that the debt collector cannot dicker without the creditor’s go-ahead, unless it has bought the debt from the original creditor. In other words, if the creditor to whom you owe the money demands that the agency collect at least 70 percent of the original debt, you won’t be able to negotiate a deal that allows you to settle the debt by paying 50 percent today. But you don’t know how much they have to collect, so it doesn’t hurt to try to strike a deal.

The most important thing to remember when dealing with a collection agency is that it wants the cash, and it wants it yesterday. By agreeing to make a lump-sum payment immediately, you may be able to negotiate a good deal. Before you call, decide the maximum amount you are able to pay now, and don’t agree to pay more. Since you are negotiating, it may be a good idea to start with a lower amount than you are willing to pay, and work up from that.

Keep Good Records: Write down details of every single conversation you have with a bill collector. Note who you talked with, when and where they contacted you, and any agreements made. Keep copies of all correspondence sent to you and from you regarding the debt. If you make any payment arrangements, send a letter to the collector outlining your agreement. This is extremely important, in case there are problems later. You may want to send your letter by certified mail, to make sure you’ll have a record of receipt.

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