Can you get a debt collector to settle for less than you owe?

Can you get a debt collector to settle for less than you owe?

Written by Caitlin Wood
Last Updated September 9, 2014

Debt collectors are seen as these scary untouchable people who must be obeyed no matter what, but the truth of the matter is that they can be negotiated with and shouldn’t be feared. Don’t trust another company to negotiate with your debt collector on your behalf because it’s possible for you to do it yourself. It might be a little scary and it might seem impossible, but it’s definitely possible and could potentially save you a lot of money in the long run. Here are our top 6 tips for successfully negotiating with your debt collector.

Be Prepared

If you want to negotiate with your debt collector then you absolutely need to be prepared and have a pretty good understanding of your current financial situation. You need to know what your monthly income is, what your monthly expenses are and any other debts you might have. This is important because you need to know what you can afford to pay to your debt collector either each month or in a lump sum. Make a budget so that you can clearly see what amount of your income is left over after all your expenses are paid. Having an exact number in your head will help you negotiate with your debt collector so that you won’t agree to make a payment that you can’t afford.

Grow a Thick Skin

This might seem like an impossible thing to do it could be your most effective tool when negotiating with your collector. There are laws that prevent debt collectors from being verbally abusive towards you in an obvious way but they are also not going to be nice to you. Debt collectors are paid to get the money you owe so expect them to do anything and everything, including insulting you and your financial situation. Being mean is a part of a debt collector’s strategy; they want to shame you into paying them and will call you names like “deadbeat” and “useless”, stand up for yourself and try as hard as you can to not take it personally.

Learn about the Statute of Limitations

In Canada each Provincial Government and the Federal Government have their own laws that govern the statute of limitations on debt collections. This means that if unsecured debt is not paid back in a certain time limit then legal action can’t be taken. It’s important that you research the statute of limitations concerning debt collections for the province you live in. If the time limit is over then you might not have to pay your debt collector.

Don’t Make Partial Payments

While making a partial payment might seem like a good idea it can in the long run hinder your debt repayment process. If you negotiate with your debt collector to make a partial payment it can restart the time period in which you can be sued and the length of time the “black mark” shows on your credit report. It’s important that you seek legal help before you decide to make a partial payment, being informed on the potential risks and consequences is your best bet.


You might not think that haggling is an option for you when dealing with a debt collector, but in reality it’s one of your best options when trying to settle for less. Don’t forget that you debt has been sold to a collections agency which is now trying to make even more money from you so it’s very likely that they have inflated your balance. Make sure you know the actual amount you owe and don’t give in to their first offer.

Your debt collector will probably try to offer you monthly payments, while this offer will sound more manageable to you, don’t accept. What you should do is try to negotiate one large payment, this way you’ll probably be able to get a much larger discount off your original balance. A debt collector gets paid on commission so they really want you to pay them as soon as possible, which makes them more willing to negotiate.

If you really want to guarantee a successful negotiation with your debt collector then contact them at the end of the month. Debt collectors usually have monthly quotas that they need to fill, therefore at the end of the month they will probably be more willing to settle your debt if it means they’ll make their quota.

Get Everything in Writing

If you’re going to settle then you absolutely need to get everything in writing. If you approve a repayment plan that you debt collector suggests then you also should get it in writing. Make sure you don’t make any payments or give the collections agency any money before you receive, what you agreed to, in writing. Finally, make sure your agreement (that you have in writing) very clearing says that once you make your payment you do not owe the collections agency any more money.

Debt collectors are never a pleasure to deal with; they want your money and will do anything to get it. But, if you follow our tips to negotiating with your debt collector you’ll be able to successfully settle your debt for less than you actually owe and make sure you’re never bothered by them again.

Rating of 5/5 based on 28 votes.

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

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