After reviewing the steps involved and interviewing consumers that attempted to negotiate their own past due accounts we conclude that if the debt is significant (over $10,000) consumers may want to consider hiring a negotiator as opposed to attempting the negotiation on their own.
We conclude that is is easier for most consumers with a significant amount of past due accounts ($10,000+) to use the services of a professional because it makes economical sense. Consumers can avoid the tremendous emotional strain of dealing with collectors as it can be an unpleasant process. Collectors can be rude, inconsiderate and are highly trained to collect money. For the most part, people failed to deal effectively with collectors on their own accounts.
Professional negotiators logically possess the upper hand. They not only have working relationships developed with the banks and collectors and deal with them everyday, but they handle large numbers of accounts, in theory giving them volume discount opportunities and they should be on top of the industry trends. Debt settlement companies (reputable ones) earn fees based on the amount of reduction they achieve. This business model is best for the consumer because the negotiator has an acute desire to resolve the account as quickly, and for as little as possible.
In considering resolving past due accounts, consumers may consider negotiating for deletion letters as opposed to negotiating for balance reductions. This is particularly true on accounts with small balances where the net savings is not significant and the past due account represents more of a credit issue than a serious debt issue.
For those consumers with less than $10,000 in total debt or, that want to negotiate on their own we offer the Collection Account Guide that includes instructions and letter templates to use when dealing with collection accounts. This guide covers both negotiating for balance reduction and for deletion letters.
