How Much Do Debts Settle For? Thoughts From A Lawyer

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0:00 Intro
0:42 Settling with creditors vs debt buyers
1:23 How much should I offer to settle?
2:48 How much do debts settle for?
3:21 Payment plans
4:06 Wrap up

We interviewed attorney, Sarah Wolk, and asked about how much to offer to settle a debt. Here's what we learned.

Debt settlements typically vary based on several factors such as the age of the debt, the amount owed, and whether the creditor is the original lender or a debt buyer. Here's a summary of the key points:

👉 Starting Offer: It's generally advised to start negotiations with an offer below 50% of the total debt. Offers less than 10-20% might not be taken seriously.
👉 Settlement Range: Settlements often occur within 40% to 60% of the total debt amount. However, it's not uncommon to settle for as low as 10% to 30%, especially if the debt is older or if it's been sold to a debt buyer.
👉 Creditor vs. Debt Buyer: Settlements with debt buyers might be lower than with original creditors. Debt buyers often purchase debts at a reduced cost, so they may accept a smaller amount.
👉 Payment Plans: Negotiations can include arrangements for payment plans, not just lump-sum settlements. These plans may involve an initial upfront payment followed by monthly installments.

The ideal settlement amount and strategy can vary, but generally, starting with a lower offer and being open to negotiating payment plans are effective approaches.

ABOUT: Sarah Wolk is the Managing Partner and founding Partner at Wolk & Levine, LLP, a boutique law firm providing quality legal services to individuals and businesses in a diverse range of practice areas throughout California.
Website 👉👉 https://wolklevine.com/