How to Haggle Your Way Out of Credit Card Debt

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The first rule is: Never accept the collection agency’s first settlement offer. The second rule is: Don’t accept the second offer either. Are you getting the idea?

WalletPop gets advice from some folks who are experts at finagling their way out of credit card debt. By driving a hard bargain, you might be able to make the collection agency go away with only one-third or so of the money you actually owe.

From the post:

First, never take the first settlement the agent offers, says Ed Mierzwinski, a consumer program director at the U.S. Public Interest Research Group. Like any other type of bargaining, the collectors expect to have to go back and forth with you, so don’t jump on the first number they throw out. “Don’t forget — you’re negotiating, not rolling over,” says Mierzwinski. “The first offer, or even the second or third, are likely to be sucker bets.” On the other hand, don’t offer mere pennies on the dollar — say, 10% or less. This makes it sound as if you’re not serious about negotiating.

[Do-It Yourself Bailout author Ken] Golde says he settled the majority of his debts for between 30% and 35% of what he owed, although your mileage may vary, so to speak. And it’s important to commit only to what you can repay.

How to Outsmart a Debt Collector