Yes, you can negotiate with bill collectors
Learn the right questions to ask and our best tips for settling up
Hi, Claire here.
Sometimes, negotiating a lower bill with a debt collector is one of your last options.
Negotiating is (famously) more art than science.
We’re not offering legal or financial advice, but over the years, we’ve learned some really interesting tactics for negotiating down medical bills — including one former collections agent’s approach.
If you’re just catching up, we’ve been looking at your options when dealing with debt collectors, including: how to check that the debt they say you owe is accurate and two other things to look into before paying.
Here’s what we’ve got when it comes to negotiating.
First, pick up the phone
You might be tempted to shove your phone under your pillow and ignore it every time a bill collector calls. But legal experts say — pick up.
It won’t feel good — this is definitely stressful. But according to Jenifer Bosco from the National Consumer Law Center (NCLC), if you ignore that call, that collector might try to take you to court. And in that situation, you won’t have a defense.
But you also don’t need to let them hassle you. Under the Fair Debt Collection Practices Act, you have the right to set boundaries around how and when they contact you.
You can send the bill collector communication in writing (and save a copy) saying: “Please only contact me at [insert phone number or email] on/after [insert day and/or time]. Calls at other times and numbers are not convenient.”
Ask the debt collector these questions
Once you pick up, take the opportunity to ask THEM some questions about your debt. This will give you helpful context about your debt you can use when negotiating a deal.
Back in 2022, Dollar For — a nonprofit that helps people crush medical debt — experimented with a project aimed at honing the best medical bill negotiation skills.
Since then, they’ve created a resource based on what they learned, including this Sample Negotiation Script.1
According to Dollar For, here are some key questions to put to the collections agent:
Will you — or have you — reported this debt to credit bureaus?
Is there any expiration date on this debt before it moves to another collector?
Do you charge interest? Or sue on debts?
Getting these answers will give you a sense of the time frame you have to negotiate. Like, if the debt hasn’t hit your credit report yet, you might want to negotiate sooner rather than later. Same if they charge interest or sue.
And if there is a sell-by date on the debt, that’s also good to keep in mind — because even if this collector doesn’t sue or charge interest, they could pass it on to another collector who does.
Another crucial question: Did you purchase this debt from the hospital, or are you collecting on their behalf?
If the collector is calling on behalf of the hospital or doctor’s office, they might be limited in how much of a discount they can offer.
But if they bought it, it’s probable they got it for pennies on the dollar, and settling with you is very much in their interest, especially now that they’re spending money calling you and sending letters.
And then ask yourself: Is there a lump sum you can offer? Or save up in a month?
When it comes time to make that deal, having that number ready is super important. But you don’t need to attempt to negotiate then and there. You can call back when you’re ready, or wait until they hit you up again.
How to hold them off until you're ready to settle
If you don’t think you’re at imminent risk of being sued or getting a brand-new dent in your credit report, one tactic we learned about in an early episode of An Arm and a Leg could come in handy.
This advice comes by way of Shaunna Burns, a former debt collections worker who says she’s had her own fair share of billing fights, and whose straight-talking TikToks caught Dan’s attention in 2020.
In a video Shaunna posted about what to do when that collector comes calling, she advises becoming the nicest person they talk with all day. (Ninety-nine percent of the people that debt collectors deal with “are f***in a**holes,” Shaunna says.)
So build a relationship, and keep them hanging on. Shaunna acts out a quick example of your umpteenth call with a bill collector named Rose:
Hi Ms. Rose, how ya doing? Did you have a good Thanksgiving? No, Ms. Rose, I still don't have any money. No, Ms. Rose, I still can't do a payment plan. I'm sorry, Ms. Rose, I still can't pay that bill.
She says if you respond to calls like this for a couple months — or six or more — and manage to keep your tone calm and friendly, you might wear the bill collector down.
Remember — it’s theoretically their job to wear you down. This is the other reason picking up is so important: it shows you can’t be intimidated — or exhausted.
Eventually, Shaunna suggests, make them an offer. Something like this:
Hey Ms. Rose! It’s my birthday! I got a check for fifty bucks. I know I owe you three hundred and fifty, but: Would you settle this in full for fifty bucks, to not have to deal with me anymore?
Shaunna says, 99% of the time, they will agree to settle and write off the rest.
And if they aren’t budging, you could hang up and try calling back to see if you get a different person on the line who’s more open to negotiating.
When they finally agree to settle
Another important tip from our friends at the NCLC: As part of that negotiation, ask for that debt to be removed from your credit report if you learned it’s already there. Or else, the collector might just report the debt as “settled,” which is better than unpaid but … still not ideal.
And as Dollar For reminds us: Make sure you get whatever they agree to in writing for proof that the debt has been resolved.
Finally, an update on the state of medical debt under the new Consumer Financial Protection Bureau (CFPB)
Last week, the CFPB asked a federal court to scrap a Biden-era regulation that would bar all medical debt from credit reports, slated to go into effect in June.
If this request is approved by a judge, it means an estimated 15 million people with a combined $49 billion in medical debt will no longer get to see that debt wiped from their credit reports.
We’ve been following changes at the CFPB and what they mean for folks with medical debt, and we’ll continue to monitor this story closely and bring you updates.
That’s all from me for now.
— Claire
Dan caught some of these tips in action when he listened to Dollar For’s general counsel speak with a debt collector, which he wrote about in this newsletter back in March.
thank you for this!