Cars depreciate, too, but not nearly as fast as consumer goods.

This is a unique quality of consumer debt when compared to secured debt. Debt that is secured can usually be cleared by simply selling whatever was used to secure the debt.

The Problem with Consumer Debt

Consumer debt, on the other hand, cannot be cleared by selling the items you purchased. Unfortunately, you will have to work off the debt — or settle it, or declare bankruptcy. And none of those is much fun.

You have the natural advantage in debt settlement, because you have something the creditor wants. Don’t cave in when they first tell you no. Maintain calm. Don’t lose it and get angry. It’s usually best to correspond with them via letters, so you have a paper trail of all your actions. Keep the attitude at all times that the collection agency will take less money then they say they will.

How much to offer
To give you some background, most bad debt companies pay or receive literally pennies on the dollar for the debts on which they are trying to collect. The amount that companies pay for bad debt depends on the type of account and its age:

•Debts that have recently been charged off: 6 to 7 cents on the dollar.
•Accounts that are slightly older and on which a collection agency or two has already taken a whack: 1.5 cents to 2 cents on the dollar.
•Years-old, out-of-statute debts: A penny or less.

Rob

Rob