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Q:
Will the collection agency offer a reduced payment again?

I have gotten in trouble with two credit cards. They have been charged off and turned over to a collection agency. I received a letter saying they would take a reduced payment if I paid this in full within 10 days. I don't have that much. Will they offer this again or reduce it again? I am trying to figure out how I can pay this off and get a good night's sleep. -Cathy

Cathy,

The collector is offering you a settlement. A settlement means that they will take a portion of the debt and write off the rest. There are two main downsides to this. First, the settlement can further damage your credit report. Second, the amount that they write off might have to be reported as income for tax purposes.

Since you don’t have the money for the settlement anyway, I recommend you call and try to make arrangements you can live with. If you come to an agreement, get the details in writing.

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