Can I Settle My Old Debt With the Debt Collector? – Josh

“Dear Steve,

I am 23, almost 24 years old and moved states about 2-3 years ago for a new job. I have owned a credit card since I was 18. I have always paid my balances on time and never had any problems, ever. I now have a debt that I owe of 6,208. With about 4,000 of what I had actually spent, the rest of it being interest.

Shortly after I turned 21, I moved out of state to work for a company that paid me pretty well. Now in the past year, I have lost my job, that I moved out of state for. After losing my job I had to move back home, It cost me substantial amount, that I had not planned on spending.

When I lost my job I moved back to my home state where I was without a job for approximately 2 months. As I was away from having a job, and not having any money, I got behind on my bills.

I recently was trying to save up money to pay off my debt. My credit card was completely canceled in December 2012. In the past year I had only made 1 payment, and it was a small one, it was all I could afford at the time.

The company that called me told me, it was the minimum of what the company would take at that time from me, They kept trying to be able to take money out monthly, but I would not allow them.

While recently I have been trying to save up money to pay off this debt, I had planned to make a call and negotiate my dept with the collector. since it has been a year without me paying much of anything, my credit report shows “charge off” as of this month.

I have about 1,000-1,500 dollars that I could pay to this, and could probably come up with about another 2,000-3,000 if I really really had to, but doing so by borrowing from my parents.

This charge off is heavily affecting my credit and will be on my report until 03/19, a prime time in my life of me needing to make purchases, and possible needing this credit

My question is to you, should I call and still try to negotiate a debt settlement? Am I to late? Can this be fixed? What options do I have?


No problem

Dear Josh,

If you have the cash to settle you are in the best possible position to talk to them about settling.

What you want to do is make sure you get their offer in writing before you send payment. You want them to agree that the balance not paid will be forgiven and you are not responsible for repaying that amount.

Keep both the letter and proof of the payment you make in a safe place with your other important papers. You will need to keep your hands on that letter in case it surfaces in the future and someone claims you did not have a settlement agreement or did not make payment. Hey, it happens.

The amount of the debt forgiven should be reported to the IRS by the creditor and you will receive a 1099-C statement at the end of the year. If you are not insolvent you will need to pay taxes on it.

Let’s take this in stages.

Please call the debt collector, let them know you might be able to come up with some money if they would settle this debt and ask them what amount they’d accept as payment in full. Then come back here and let me know by posting an update in the comments below.

Once we get that information we can take it to the next step.

And don’t worry about your credit, I can show you how to rebuild good credit.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

2 thoughts on “Can I Settle My Old Debt With the Debt Collector? – Josh”

  1. Okay this is Josh I’m working on one of my partners old CC now. He has a card that collections states he owes $2088.86. They have sent a letter to settle the account for 40% of the balance if paid by the 14th of this month. (835.55) I have the funds. how should I handle this?

    • Never lose that letter and make the payment as you’ve mutually agreed in some fashion you have proof the payment was made. Keep the payment proof and offer letter with all your other important papers and never lose them.


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