Yes, You Can Negotiate with Debt Collectors: Here’s How

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Have you ever answered your phone and discovered a debt collector on the other line? If so, you may have felt your stomach sink or your blood pressure spike in response.

Yet before you hurry to click the “end” button on the next collection call you receive, keep this in mind: Ignoring your debt collectors may provide you with a moment of peace, but it won’t fix your situation. In fact, if you ignore a debt collector long enough, your problem could potentially escalate.

Thankfully, you have many rights when it comes to third party debt collectors. You also have options. Even if you can’t afford to pay the balance in full, you might actually be able to negotiate with debt collectors.

If you’re ready to face your debt collectors head-on, here are some key tips on how to get started in order to negotiate with debt collectors.

1. Know Your Rights

When it comes to third-party debt collection, you’re protected by both state and federal law. On the federal side, the Fair Debt Collection Practices Act sets strict guidelines on how debt collectors should behave. For example, debt collectors can’t:

  • Lie to you.
  • Discuss your debt with others (except your spouse or attorney).
  • Harass you.

Your state also sets guidelines which determine how long a debt collector can try to sue you over an unpaid debt. The limits vary, but in most states debt collectors have between three and ten years to sue you, if they wish to do so.

2. Make Sure The Debt Is Legitimate

Sadly, not all collection calls are legitimate. There are scam artists who will pose as debt collectors and try to steal your money. Before you agree to pay any debt collector, it’s a good idea to take the following steps:

  • Mail the collector a verification request asking for more details. The CFPB offers a free verification letter template with instructions online. Don’t drag your feet on this step. You have more rights during the first 30 days after a debt collector initially contacts you.
  • Get a copy of your three credit reports from Equifax, TransUnion, and Experian. See if the debt collector and the debt in question appear on your reports. You can claim a free copy of your three credit reports once every 12 months from Remember, just because a debt or debt collector doesn’t appear on your credit reports doesn’t mean the debt is phony. Still, it is a possibility and you should proceed with caution.

3. Have A Plan Before You Call

Collection agencies routinely purchase old debts for pennies on the dollar. So, even if you settle an account out for 30% to 50% of the original balance, the debt collector will still likely be making a nice profit which is exactly why it is possible to negotiate with debt collectors.

To score the lowest settlement possible, it helps to have a plan in place before you pick up the phone to give the debt collector a call. A few tips to do just that:

  • Know how much you can afford to pay in one lump sum. (Smaller payments might reset the debt collection clock in your state and open the possibility for you to be sued for the remaining balance.)
  • Ask the collection agency how much it’s willing to accept as settlement in full before you make your first offer.
  • Don’t be afraid to counteroffer multiple times until you reach an amount you’re comfortable paying.
  • Be willing to call back later to try to get a better deal.
  • Ask upfront for the collection account to be deleted from your credit reports once you pay. The agency doesn’t have to agree, but it never hurts to ask. Getting the negative account deleted could help your credit scores.
  • Get the offer in writing before you pay. No exceptions.

4. Protect Yourself

Debt collectors get a bad rap, but they aren’t all horrible people. On the other hand, many debt collectors are known for using abusive and predatory actions. There’s a reason debt collection remains the number one consumer complaint category year after year, according to the FTC.

It’s important to know your rights and be cautious when dealing with debt collectors. If you can afford to do so, consulting with an attorney is wise.

Michelle Lambright Black is the founder of and She is a leading credit expert with over a decade and a half of experience and an expert on credit reporting, credit scoring, identity theft, budgeting, and debt eradication. Michelle is also an experienced personal finance and travel writer. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).

Feature Image: The Money Manual