When negotiating with a creditor, try to settle your debt by 50% or less, which is a realistic goal based on creditors' record with debt settlement. Offer a specific dollar amount that is approximately 30% of your outstanding account balance. The lender is likely to counteroffer with a higher percentage or dollar amount. If anything above 50% is suggested, consider trying to reach an agreement with a different creditor or simply putting the money into savings to help pay future monthly bills.
The key to making the negotiation of an agreement work 25 to 50 percent is preparation. You need to have the right amount of cash handy, as well as some tools in your box to make sure debt collectors don't deter or discourage you. Always make an offer that is less than the total amount you can afford. It can be helpful to note the maximum payout you're willing to make and keep it in front of you during negotiations.
Be careful to make promises you can't keep or offer to pay more money than you can afford. You don't want to stretch your budget too much, without having money left for living expenses or ending up in breach of a debt settlement agreement. Lenders usually agree to a debt settlement of between 30 and 80%. A number of factors can influence this amount, such as the financial situation of the debtor and the available cash available.
When considering the answer to the question “What percentage should I offer to pay off the debt? also consider other factors, such as the term of the debt.