Negotiating With Debt Buyers
Unless you have a good reason to refuse to pay your debt, you might want to consider negotiating with a debt buyer. These companies have a different business model than traditional debt collection agencies. Instead of pursuing your bill for a certain percentage of the debt’s total value, they’ll often wheel and deal to settle your account with a minimal amount. In fact, according to the Consumer Financial Protection Bureau’s annual report, debt buyers accounted for one third of the nation’s debt collections in 2017. However, you’ll need to know your rights when dealing with a debt buyer and how they work before you negotiate with them.
The first step to negotiation with a buying debt is to understand how they operate. Most debt buyers buy debts for pennies on the dollar and hope to recoup at least part of it. While creditors and collection agencies always want to make as much money as possible, they’ll often settle for 20 to 30% of the original face value, allowing them to make a profit. You should also know that you can get a better discount by starting lower than the full amount.
Debt buyers are only able to settle your debt if they can prove ownership of the debt. They typically won’t win litigation against consumers because they don’t have the documentation to prove their case in court. Nevertheless, you can still negotiate with them by lowering the amount that you owe. If your debt buyer doesn’t have sufficient documentation, you might want to consider settling for a lesser amount.
Negotiating With Debt Buyers and How to Negotiate With Them
When negotiations are going well, the debt buyer will usually settle for pennies on the dollar. But the debt buyer will likely want to settle for a higher percentage than what you owe. Entering into a new payment arrangement will ruin your credit score and make it easier for them to sue you. If the statute of limitations has expired, it’s more likely that the debt buyer will have a defense against the lawsuit, which will prevent the collection agency from getting a judgment against you.
It’s not a good idea to negotiate with a debt buyer. If you don’t have the funds to settle the debt, you could risk losing your credit score. A debt buyer will be able to get more money by settling for a lower percentage. Even if you can’t win in court, the debt buyer can still take legal action against you if you don’t provide all the information they need to settle the debt.
The only way to negotiate with a debt buyer is to keep in mind that debt buyers aren’t the best option for you. They’ll buy your debt at pennies on the dollar, and then try to collect the rest of the debt. That means you’re paying them to make money. The more you pay, the better, but that will increase their chances of making a profit.