This post originally appeared on credit.com.
If you are getting calls and letters from debt collectors and want to resolve the debt, you need a plan. Your first priority should be developing a strategy that makes sense for you financially. You need to know your monthly budget and the amount of money you can commit to resolving collection accounts. And if you have more than one account in collections, you also need to know that not all debt collectors are the same.
1. You Can Work With the Original Creditor…
You can often work out some form of payment by calling your creditor directly, or by working with a nonprofit credit counseling agency. But when credit card payments go more than six months without a payment (sometimes sooner), calling your creditor often means being routed to a third-party debt collector. If your creditor tells you they cannot work directly with you; has not sold your account off to a bad debt buyer; and has already charged off your account, you will typically have to work with the debt collector they sent your account to.
Your strategy to resolve a debt can be adjusted depending on what kind of debt you have, and the type of collector you are dealing with.
2. …Or a Third-Party Debt Collector
The collection industry is large. There are thousands of companies, big and small, working to collect billions of dollars of debt each year. Your strategy to resolve overdue bills can be adjusted depending on what kind of debts you have (medical debts, utility bills, etc.), and the type of collector you are dealing with.
Debt collectors that work directly with your credit card lender are typically going to be larger contingency collection agencies. They make calls and send you collection notices in an attempt to collect. All of which is motivated by the fact that they will get paid based on what they get you to pay. A common earned contingency fee is 15% of the balance they collect.