How Does a Collection Agency Offer Settlement When Collecting for the Original Creditor?

How Agencies Reduce Debt

• Agencies can work with the original creditor of the debt to agree upon a settlement amount. Many creditors settle because they want to receive as much of the original payment as possible. By reducing the amount of debt, people are often more likely to pay some of the original debt.
  
  

How Much Debt is Reduced with Collection Agencies

• The actual amount of the debt that is owned is often settled for pennies on the dollar. According to Fair Debt Collection, each time that your debt is sold to another company for collection, it actually is settled for less. You will want to verify the amount that is actually owed with the company instead of the original amount of debt.
  
  

Collection Agency Tips

• Collection agencies may be able to offer you a few different options when you are settling a debt. If you have an amount that you would like to propose to settle the debt, you can submit a debt settlement letter to the agency with the offer that you are able to pay.