How to Negotiate with Debt Collectors | Pros & Cons

Negotiating with Debt Collectors

Many people who are in debt can feel consumed by their debt and fear that there is no way out except to file bankruptcy. What they don’t realize is that there may be another option available through a debt negotiation.

Negotiating with Convergent Outsourcing

At this time, the best way to negotiate your debt with Convergent Outsourcing is to call one of our representatives at 800-444-8485. Please be aware that our customer service representatives are available Monday to Friday, 7am to 5pm Pacific Standard Time. They will ask you to confirm your identity and for your account number, then you can notify us that you would like to negotiate a payment plan or a lump-sum settlement that fits within your budget.

Pros & Cons of a Debt Negotiation

Sometimes life gets in the way and paying your debt in full is just not an option financially. If you find yourself in a situation where you are no longer able to make regular payments on your account, debt negotiation may offer an alternative. Listed below are some of the positives and negatives of reaching a settlement with your debt collectors:


  • You may be able reduce the amount you owe
  • You may be able to resolve the debt with one lump sum payment
  • It may help you avoid filing for bankruptcy


  • You may have to pay taxes on debt forgiveness
  • Your credit score may be negatively impacted

How do you negotiate with a debt collector for a reduced balance opportunity or payment?

The point of a debt negotiation is for you and the debt collector to make an agreement that fits in your budget; after taking into account your income, assets and other debts, the collector may offer you a reduced balance opportunity. If the agreed amount seems favorable for your financial situation, you can agree to it and either resolve your debt with a lump-sum or begin making payments.

Do you have to pay taxes on your reduced balance opportunity with a debt collector?

If you and the debt collector agree to a lump-sum reduced balance, you may have to pay taxes on your reduced balance depending on the amount paid. This is something to keep in mind when you decide whether to negotiate a reduced balance with your collection agency. We recommend discussing the reduced balance with a tax professional to ensure that you understand what will be required when you file your taxes for the year.

Will debt negotiation impact your credit score?

While settling a debt may provide immediate financial relief, it may have negative consequences on your credit score. A debt settlement may be reported on your credit report and this may be seen by future creditors. If you have questions about how debt impacts your credit score, you should contact the credit bureaus directly.

You may be able to avoid filing for bankruptcy.

If your financial situation looks bleak, you may find yourself faced with the possibility of filing for bankruptcy. However, negotiating your debts with the collection agency may help you avoid bankruptcy by providing options that fit within your budget. If you are wondering how settling your debt may help you avoid bankruptcy, we recommend seeking advice from a bankruptcy attorney. For more information on your options for dealing with debt, go to the Consumer Financial Protection Bureau.

Additional Resources

Learn more from our other FAQ articles:

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About Us

In business since 1950, Convergent is one of America’s leading collections agencies. As an accredited agency, all of our representatives are thoroughly trained on customer service and Fair Debt Collection Practices Act compliance. We believe in customer service and want to make it easy as possible for people to pay the debts they owe.

Our Contacts

800 SW 39th Street, Suite 100
Renton, WA 98057

7 am to 5 pm Pacific Time
Monday to Friday

New York City Residents: Please be advised that language access services, including the translation of information into a language other than English, may be available. A translation and description of commonly-used debt collection terms is available in multiple languages on the New York City Department of Consumer and Worker Protection’s website,

Maryland Residents: This agency is licensed as NMLS ID # 930053. For more information or to verify license status, visit the NMLS Consumer Access website at

North Carolina Residents: This agency is licensed by the North Carolina Department of Insurance, Company Number: 119507691, 119500362, 119500979, 119500976, 119506893, 119507004, 119506891, 119506890, 119506889

California Residents: California license pending

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