The short answer to this question is yes, you can offer a full and final settlement for a debt with a debt collection agency. Quite often when I call a debt collection agency, I find that they will offer me a settlement figure for the balanced owed. Typically this is around 50% of the balance owed. Most of the time I cannot afford too but at least the option is there.
How can you make a full and final settlement offer?
You can use the example full and final settlement letter template on this blog. Send it to the debt collection agency and wait to see what they say. I recently made a full and final settlement offer to a company called UncleBuck, saving me quite a lot of money off what I owed. More about that can be found here.
It is definitely worth trying anyway as it can save you a lot of money, and if you have a lot of debts, it means you have one less account to deal with. You can also read more about Full and Final Settlement for your debt on this blog too if you are interested to get a general overview.
What happens to the account on your credit file?
Typically if your account has been marked as defaulted, then once you make payment in full and final settlement of the account, it will be marked as partially satisfied. This is different than when you pay off your debt in full, as a default in that case would be marked as satisfied. I am not convinced this makes much difference because most lenders don’t like to see defaults on your credit file full stop. However this is something to keep in mind if the aim is to repair your credit score.
You can be cheeky and also ask that the default is removed as part of the full and final settlement. You might get lucky and this will be done for you. If you don’t ask, you don’t get so it’s always worth a try. That way the negative data will no longer be recorded on your credit file, and you can move on to your next debt if you have one.
No I think the most important stuff has been covered above. Good luck with settling your debts and I hope you save some money in the process.