Which Types of Debt Payments Can You Negotiate—and When Might Creditors Agree?

Credit card balances

Credit card debt is often among the easier types of consumer debt to negotiate because it is usually unsecured. If an account becomes seriously delinquent, the issuer may weigh collecting the full balance against accepting a smaller lump sum to close the account.

Issuers and collection agencies may be more open to settlement after an account is charged off or sent to collections. But waiting until that point can significantly damage your credit.

Medical bills in collections

If you reach a settlement, get the agreement in writing before paying. Confirm that the agreed amount will satisfy the debt in full.

Student and secured debt

Private student loans are typically harder to negotiate while payments are current, because lenders generally expect repayment under the loan terms. Lenders are usually less willing to forgive part of the balance.

For debts backed by collateral, settlement may happen after the collateral is sold and a deficiency balance remains, or through a negotiated short sale. The article does not identify a specific type of secured loan.