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Offer a Lump-Sum Settlement Some want 75%80% of what you owe. Others will take 50%, while others might settle for one-third or less.

ing to the American Fair Credit Council, the average settlement amount is 48% of the balance owed. So yes, if you owed a dollar, youd get out of debt for fifty cents.

Typically, a creditor will agree to accept 40% to 50% of the debt you owe, although it could be as much as 80%, depending on whether youre dealing with a debt collector or the original creditor. In either case, your first lump-sum offer should be well below the 40% to 50% range to provide some room for negotiation.

Debt Settlement Company Fees Their account set up and management fees typically amount to 15% to 25% of the total debt you owe, and many companies wont work with you unless you owe $10,000 or more on credit cards. If you owe a total balance of $10,000, the bill would equal $1,500 to $2,500.

Offering 25%-50% of the total debt as a lump sum payment may be acceptable. The actual percentage may vary depending on the circumstances of the borrower as well as the prevailing practices of that particular collection agency. One benefit of negotiating settlement terms is likely to reduce stress.

Completion rates vary between companies depending upon a number of factors, including client qualification requirements, quality of client services and the ability to meet client expectations regarding final settlement of their debts. Completion rates range from 35% to 60%, with the average around 45% to 50%.

Your debt settlement proposal letter must be formal and clearly state your intentions, as well as what you expect from your creditors. You should also include all the key information your creditor will need to locate your account on their system, which includes: Your full name used on the account. Your full address.

You may need a significant amount of cash to settle your debt. Consider starting the negotiation by offering to pay 25% or 30% of your outstanding balance in return for forgiveness on the rest.

You need to have enough money in a lump sum to be able to entice them to settle. Start with lowballing, Schwab says. If you can only pay 60%, start by offering 30% so you give yourself enough room by meeting in the middle during negotiations.

These fees are usually from 15% to 25% of the total debt you enroll in the program, though some reach as high as 30%. Some debt settlement programs charge this fee based on the initial amount of debt you bring into the program, while others charge based on the amount of settled debt.