Negotiate with


How to settle your debts for less than what you owe

Life throws us curveballs, and some of those may result in substantial debt. If the amount of your debt feels overwhelming,
you may want to consider negotiating with your creditors to pay less than the full balance. There are two options:
You can negotiate with individual creditors yourself, or you can work with a third party who will negotiate on your behalf
to pay off debt on delinquent, unsecured credit accounts and personal loans over a specified time (or all at once).

For example, if you have a $10,000 credit card balance, you may only be required to pay
$4,000 to close and “settle” the account and have the remaining $6,000 forgiven.

20-25% of Total debt

Traditional Debt Settlement Company Fee


15% of Total Savings

Resolve Network Fee


  • You’ll likely pay less and get out of debt faster.
  • If you’ve missed payments with your creditor, and are in collections, settling will eventually help your credit.
  • It can improve your financial situation.
  • It can help you avoid being sued if you’re already in collections.
  • It can help you move on to accomplish other financial goals: You can apply for credit cards, loans, and mortgages right after your last settlement payment.


  • You must have the money to pay off the debt at the negotiated amount.
  • Your credit score temporarily drops, if it hasn't already, due to late payments.
  • Taxes may apply to the amount of debt forgiven in your settlements.
  • Once you’re committed to a Debt Settlement Agreement, you can’t miss a scheduled payment or you’ll risk nullifying the agreement.
  • Your account will be subjected to internal/external collections, which could include being sued.


How can I unenroll from my debt settlement company?

How can I unenroll from my debt settlement company?

If you are currently enrolled with a debt settlement company and you would like to end your relationship with them,…
5 steps to rebuild credit after debt settlement

5 steps to rebuild credit after debt settlement

A settled debt is better than an unpaid, past-due one on your credit report, but settling a debt can often…
What is a debt buyer and why should you care?

What is a debt buyer and why should you care?

Buying debt is a big business. Gaining ground in the savings and loan crisis of the 1980s-90s, debt buyers today…

The problem with traditional debt settlement companies

Not all companies that offer debt settlement services have your best interests in mind. Some charge hidden and excessive fees. (Read about a consumer’s experience here.) Some negotiate your accounts in an order that gets them paid faster rather than saving you the most money. When selecting a provider to help you negotiate with creditors, you can start by checking out the company with your state Attorney General and local consumer protection agency.In addition, the FTC cautions against using any company that:

  • charges any fees before it settles your debts
  •  touts a “new government program” to bail out personal credit card debt
  • guarantees it can make your unsecured debt go away
  • tells you to stop communicating with your creditors, but doesn’t explain the serious consequences
  • tells you it can stop all debt collection calls and lawsuits
  • guarantees that your unsecured debts can be paid off for pennies on
    the dollar

You can find out more about different settlement companies here.

A responsible alternative to traditional debt settlement

Resolve takes a different approach to helping people negotiate their debts. The negotiators in the Resolve Network charge rates that are fair and substantially less than traditional debt settlement companies. For example, while a traditional company charges 20–25% of your TOTAL DEBT, Resolve Network partners charge 15% of WHAT YOU SAVE.

Here’s an example to illustrate the difference:

Typical Debt Settlement Company
Resolve Network Service Provider
Your debt: $30,000
Your debt: $30,000
Your fee: 20-25% of your debt TOTAL
Your fee: 15% of your total SAVINGS
You pay $6K–$7.5K
If all your accounts settle for $14K, you’d be 15% of $16K (what you saved), which is $2,400.
It doesn’t matter how much they save you; you pay them the same amount.
You pay based on how much the Resolve Network service provider saves you.

Risks and alternatives​

Negotiating with creditors may or may not be the right option for you. You need to consider the risks, such as the possibility that you’ll be sued and, if you miss a payment, you may be back at square one. It’s also wise to consider how it impacts your credit and that you may owe taxes on the amount of debt forgiven on your accounts.

We recommend consulting a tax attorney or tax advisor for information specific to your situation, but here are some things to consider regarding the potential impact on taxes:

  • Not everyone will owe taxes on their settlements.
  • If you have a debt that is settled for less than the original balance, and the difference (the forgiven portion of the debt) is more than $600, you’ll need to report this as income. You should receive a 1099-C tax form from your creditor.
  • Remember, if you end up owing taxes, it’s because you saved money. Just as you set aside funds to use for settlements, if you’re solvent and owe taxes on any forgiven debt, you must also set aside funds to pay the taxes.

How does negotiating with creditors impact my credit?

There are pros and cons to settling debts. Creditors will actually not settle with you unless you make late payments. These late payments have a negative impact on your credit score. In fact, on-time payment history is roughly 30% of how your credit score is factored. It’s likely, however, that you’re considering settling your debts because you’re already late on at least some of your accounts. Because this is already impacting your credit score, settling your accounts can help your credit heal and your credit score recover.

If debt settlement is not the right choice for you, some alternatives you may consider are reducing your interest rates and eliminating fees, consolidating your debts, or filing for bankruptcy.

How does debt settlement work with Resolve's help?

  1. If you’re at least 90 days late making a payment on an unsecured debt, you can negotiate a settlement with the creditor.
  2. To do this, you or your representative, such as a service provider in the Resolve Network, contact your creditor (or their representative, such as a collection agency or collection lawyer) to begin the process.
  3. You or your representative negotiate to pay less than your current balance and agree to either a one-time lump payment or a payment schedule.
  4. If you work with one of the service providers in the Resolve Network, they’ll create a Debt Settlement Plan based on your budget and needs, including an outline and estimate of:
    • what your settlement(s) will cost
    • how long the settlement plan(s) will take to complete
    • when you should target certain creditors
    • the Resolve Network service fee
  5. You review the plan and your representative will answer your questions.
  6. When you’re ready to proceed, negotiations begin. If you have multiple unsecured credit accounts that are past due, your service provider in the Resolve Network can help you negotiate amounts and timelines that fit your ability to pay and also pay off creditors in an order that saves you the most money and reduces your risks.
  7. Creditors will often base their agreed settlement amount on how delinquent your account is, how long you’ve had the account, and how collectable you look on paper (i.e., whether you appear to be managing at least some of your debts well).
  8. Once your service provider receives the terms from your creditors, they’ll update the Debt Settlement Plan for your review. Before you commit to a final plan, they’ll present each offer with a comparison to the plan, a recommendation, and the fee to settle.
  9. Once you commit to your Debt Settlement Agreement, it cannot be altered.
  10. You must adhere to the terms of the agreement or your debt may not be resolved. For example, missing a scheduled payment may nullify the agreement.

Frequently Asked Questions

What is debt settlement?

Debt settlement is the process of paying off your debts…

How does Debt Settlement work?

Debt Settlement is a negotiation between you (or your representative)…

Why are creditors willing to settle?

It is an accepted business practice for creditors to take…

Helpful tools

While you can negotiate with creditors directly, do your own research first. You can calculate what you might save with a debt settlement calculator and then use a debt consolidation calculator to assess if this is a viable option for you instead. You can also use a credit card payment calculator to assess how long it will take to pay off your credit card(s) if you don’t choose a settlement plan.

Debt Settlement Agreement — Build the contract for your settlement documenting the criteria you negotiate with your creditor.

Credit Dispute Letter — Draft a letter to dispute information on your credit report.

Debt Consolidation Calculator – Assess if debt consolidation is a viable option for you. 

Credit Card Payment Calculator – Discover how long it will take to pay off your current credit card balance.

How Resolve can help

While the tools listed above can help you explore your options for getting out of debt, you may find it challenging to determine the best course of action for your situation. That’s where Resolve comes in. Our primary goal is to assess your personal situation and help you understand your options.

What’s more, we offer a responsible alternative to debt settlement companies that charge high fees and prioritize getting themselves paid. Our solution prioritizes saving you the most money. In fact, our decision-making engine and debt guidance are free. You can review and compare your options and ask our experts questions. And you can get debt settlement estimates and a settlement plan for free.

There is no cost to you unless you decide to work with one of the service providers in the Resolve Network. Our partners can help you achieve your goals and may be able to help you avoid debt settlement.

If you haven’t yet created a Resolve account, you can get started here.

Make your money go further as a Resolve member​​

As a Resolve member you will be able monitor your credit score, get powerful budgeting tools, debt relief recommendations and much more.

We use bank-level security with 2048-bit SSL encryption and will never share your info without your consent


Resolve is an accredited company with the Better Business Bureau​


We were selected as a winner of the prestigious CFSI Financial Solutions Lab by J.P. Morgan Chase

Copyright © 2020 Resolve Innovations, Inc., a Public Benefit Corporation. All rights reserved.