What will a collection agency do?

I am not in this situation at the moment and at all costs I am trying to avoid it. BUT..let's say someone had debt turned over to a collection agency due to deliquent payments... does the collection agency attempt to settle or negotiate with the person? So for example if a person had 20,000 in debt..could that be negotiated to a lesser amount and set up on some sort of payment plan with the collection agency?

If the creditor turns the debt over to a collection agency, the collection agency will receive a minimum of 1/3 of the total amount they (are able to) collect from you. Assume the collection agency is able to collect $20,000 from the debtor. You know then, the creditor is willing to give up at least $6,600 to a collection agency just to get rid of the collection headache. You cannot collect something from someone who has nothing. If a debt is turned over to collection, the creditor is already assuming something is better than nothing. In other words, if they can get $2,000; that is better than zero!
In answer to both questions:
Yes, you can negotiate an amount lesser than the $20K, but the creditor will want the lesser amount paid in full. (They want to get rid of you. They are willing to give away at least $6,600 to get rid of you.) Do you have $10K you can offer to the creditor (not an agency!) to settle the debt in a final and full settlement? (If yes, do not pay a cent w/o a settlement agreement in writing.)
If no, attempt to work out a settlement payment less any finance charges that have been added on to the actual amount of the debt. Again, get any settlement agreement in writing and do NOT fail on your agreed monthly payment amount. It is worth a try.
P.S. And, CUT UP the darned credit card!

they may negotiate with you but it will still end up on your credit report as a black mark. Initially they will try to increase the amount owed to perhaps $24,000 (their "fee') and quote you a high interest rate - 12% would be on the low side.

You do not want a bill to go to collections. they make your life miserable. They call relatives, call at odd hours, and contact your employer. Ultimately they get a court order and garnish your wages. On top of that, the bank charges you every time they have to give money from your account to the collection agency. Typically, $100 per transaction.

Generally speaking they will not settle for less and take payments. Usually it is one or the other.

Don't screw around much longer, once they take you to court you can add around 20% for fees and court costs.

Good luck

You don't say whether this is credit card or a student loan or what kind of debt. Call your original debter and try to arrange a deferment or arrange to spread payments out so you can afford them. You might try to refinance your debt. Just don't let it go. It will kill your credit and cost you lots of money. Good Luck.

When a debt is turned over to a collection agency, that agency uses whatever legal means it can to recover that debt, including taking the person to court. they will be prepared to negotiate a payment plan, but not a reduction in the amount. In fact the amount will actually be increased by their collection fees and whatever costs they incur. The person who owes the debt will also go on a bad credit register.

Yes - they will settle.

That is exactly what they will do.

Absolutely...and you can often settle for as little as 30% of what you owe. Check out the article below. It will tell you step by step how to negotiate with these people, what your rights are, and some things that will affect your score. Most people aren't aware of this information...so definitely read the first one. Collection agencies will often settle and take three postdated payments to wipe that bill out.

The second article is about how to bring your credit score up in 30 days. If you do settle, you will want to do this so that your score can rebound quickly. If you don't, it could take seven years to get a decent score again.

Hope this helps.

In that situation, it is often best to use a non profit agency such as CCCS. Debt is consolidated, and payments can be made. It does adversely affect credit rating, but at least the situatation is solved. Keep in mind that negotiating repayment of debt for a lower amount becomes a taxable situation. The one who forgive the debt wwrite off the bad debt, and you have to declare the forgiveness of debt as income.

There are a lot of factors to take into consideration before one can answer this properly
1) is the debt time barred (past the statute of limitations) The clock starts running on the last date of activity on the account.
2) has this debt recently been purchased by the collection agency. Many junk debt collectors try and collect on time barred accounts.
3) Has this debt recently been turned over for collections. If this is the case, settle it NOW before it goes to court and a judgment is placed against you.

Here are some links to learn more
http://www.fair-debt-collection.com/inde...
http://www.budhibbs.com/drowning_in_debt...
http://www.ftc.gov/bcp/conline/pubs/aler...
Information on time barred debts.

I invite you to join the following Yahoo group "DontGetRippedOff" dedicated to helping those in financial trouble, Here you will find information to help you with debt collection agencies.
http://finance.groups.yahoo.com/group/do...