The best way to pay debt collectors over defaulted accounts is to settle for less in a one-time, lump sum payment…where you negotiate the terms in writing first, then pay. This way the debt is resolved and you don’t have to worry about them (or another collection agency) coming back after you for the same debt. Assuming you have cash saved up, then offer to settle this account in full for 25% of the defaulted amount and go from there. Never agree to any settlements over the phone unless they are backed up in writing…in you don’t the debt collector will deny that any settlement was ever made once they get your money and come right back demanding more money. Pay only via a USPS money order. Photocopy everything and keep in your records forever as documentation that the debt was resolved. Never give debt collectors your bank account numbers.
Making monthly payments to debt collectors should be avoided if at all possible because:
– They could take your monthly payments for 7 or so months then turn around and resell the account to another collection agency, which would restart the collection process all over again and you’d be powerless to challenge it
– Any monthly payments you make could go down a black hole of high interest and fees…so you might pay for 2 years and the balance will not go down.
If you must pay on a monthly payment plan, then make sure that you get account statement every other month from the collection agency to confirm that your balance owed is really going down and not just staying the same.
Dealing with debt collectors
As a general rule: If a debt collector’s lip’s are moving, they’re lying. Any promise made over the phone about a settlement should assumed to be a lie unless those terms are backed up in writing.
Credit and Debt Help 
I have a 3rd party collector, GC services, who is in charge of my citi bank credit card. They just received the account in January. They will NOT leave me alone. They are unwilling to set up a payment plan. They stated I had to pay $2000 of the $5500 I owe them up front in order to make monthly payments of $178 to fulfill the rest of the debt. I cannot do this. They keep harassing me. They wont even put the above offer in writing, they told me they could not do this. I dont know what to do. I am stressed. I have made a payment for January and February. My account is “charged off”…any solutions?
Quick question: I have about 30.000 in debt,mostly credit cards.I had lost my job and so I couldn’t make the payments anymore,its been about 5 months now since the last payment.First I was looking at bankruptcy until I researched a little more and decided that I’m gonna try to settle my debt for less,but I first wanna save some money so I can pay them in full.Now my questions is:do credit card companies always see the debt to some collection agency after a while? And also,how long could it take until they might try to take me to court to try to get a garnishment? Is there a certain amount of debt you have to have,is it like if one owes only a few thousand backs that they might not even bother going thru the proccess…