Once you confirm that you owe a debt, you can pay in full or propose a repayment plan to the debt collector. If you want to make a proposal to repay this debt, here are some questions you should ask yourself:
How much can I realistically afford to pay each month?
First, review your current financial obligations. Write down your monthly take-home pay and your monthly expenses , including the amount you want to repay each month. Try to allow some income left over to cover unexpected expenses and emergencies. Keep in mind that falling behind on other bills, even if you’re paying off this debt, could cause you more problems. If you’re struggling, a non-profit credit counselor can help you create a budget and work with the collectors.
What is the total amount I’m willing to pay to settle the entire debt?
This could be one payment or a series of smaller payments. Don’t pay more than you can afford. If you have more than one debt with a debt collector, you can direct the debt collector to apply your payments to a specific debt. Debt collectors are not allowed to apply a single payment for multiple debts that you’re disputing.
Use our debt worksheet for calculate your debts and document your plans for paying them off
Avoid companies that charge money in advance to settle your debts for you
Dealing with debt settlement companies can be risky. Some debt settlement companies promise more than they can deliver. Certain creditors may also refuse to work with the debt settlement company you choose. In many cases, the debt settlement company won’t be able to settle the debt for you anyway.
