Repay debts for pennies on the dollar

Woman holding head in her hands, next to computer

If a legitimate bill has been turned over to a debt collection agency, you can settle the claim for far less than you actually owe.

That's because agencies either work on commission or buy bundles of bills that hospitals or credit card companies couldn't collect for pennies on the dollar.

Either way, they can accept a deeply discounted partial payment and still make money.

Simply ask the collector: "How much do I have to pay to make this go away?"

While the amount they're willing to accept varies, it usually ranges from 30% to 50% of the debts.

You don't have to pay it all at once. Collection agencies are usually willing to negotiate monthly payment plans. Just be sure you get the terms in writing.

If you need to buy a little time while figuring out what to do, offer to pay something, even if it's only $20.

That should take you out of the agency's calling queue for at least week, maybe even a month.

Just make sure to make good on your promise with a check or the collector will be much less amenable the next time you speak.

If you're being barraged with debt-related calls, our 10 steps to get debt collectors off your back can help.