- 1). Do not agree to pay more on your debt than you can reasonably afford each month. Even if it is five dollars a month, something is better than nothing, so long as the payments are made each month and on time. Do this until you have reached a point you can settle this debt.
- 2). Figure out what it would take to settle the debt. Most collection agencies will take a payoff of 70% of the original debt. To find this amount, multiply the original debt by .7, and keep track of any payments made toward that amount.
- 3). When you have enough cash on hand to make the pay off, call the collection agency and offer to settle your debt for the amount of money it would take to pay 70% of the original debt. Collection agencies are more apt to agree to this toward the end of the month, when they are trying to close out as many debt accounts as possible.
Use tax returns, have a yard sale, or sell other items of value to acquire enough money to settle the debt. You don't need this debt hanging around on your credit score weighing you down. - 4). Make sure your file with the collection agency is marked paid in full, instead of charged off. Your goal is to settle the debt while preserving as much of your credit score as possible.
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