Debt Collection Agencies - Negotiations

mi55_bee

Hi there

Does anyone have any tips for negotiating with debt collection agencies ?

My partner has been left with all the debt following the break-up of his marriage. His ex-wife is not paying her 50% and he has even overpaid on some of the debts.

An old debt for a hire purchase agreement has been sold on to a debt collection agency - does anyone have any experience with negotiating to pay back less than the total value of the debt. Im assuming that the debt collection agency have bought debt for less than the value and hope to recover the full amount therefore making a profit ??

Does anyone know at what percentage the debt is bought for ??

Trying to cut off all ties with debt associated with his ex-wife so that he can start improving his credit history.

Many thanks

Tixy

When you say he has overpaid on some of the debts - do you mean he has paid more than the full outstanding balance - if so he needs to request a refund. If you mean he has paid more than 50% on a joint debt then unfortunately he is still liable for the remaining 50%.

There is no way of knowing how much the debt collection agency paid for a debt. It could be anything from 8p in the pound to 30p in the pound.

If you want to offer a reduced full & final settlement (in a lump sum) then this needs to be done in writing and you need confirmation from them in writing that it will be in full & final settlement before you pay.
Have a look at this factsheet - http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers for tips and a possible template letter.

What percentage they'll accept depends on a lot of different things, whether the debt could be enforced in court, whether you are paying anything towards it currently, how long it will take to pay off at current repayment level, how much they think you can afford, whether they are still charging interest, what time of the month or quarter is it (they have targets to reach) and all sorts of other things.

Always start with a low offer, then you have some room to negotiate if you need to increase your offer a little. Perhaps start at 20% of the outstanding balance.