Can I settle debt with my original creditor?

It is possible in certain instances to settle debt with your original creditor. However, you must do so before your creditor sells the debt to a collection agency, as once the debt is sold, the creditor no longer has the right to collect on it or make a deal with you. Typically, when a lender or creditor believes that it may have to sell the debt to a collection agency, this becomes the prime time to negotiate the debt since the lender knows it will get only pennies on the dollar if it writes off and sells the debt. 

While the exact process of settling debt can vary from creditor to creditor, in general, the best time to try to negotiate debt is when you are around 3 months behind on the payments that you owe but no more than 6 months behind. Of course, if you are making payments on time to the creditor, there is going to be no incentive for it to negotiate with you to settle debt since it can just sit back and keep getting paid. If you wait too long, though, then the chance is good that the debt will be sold off. Usually, but not always, this sell-off or write-off on the part of the original creditor happens right around that 6-month mark. 

If you are considering settling debt, the best thing to do is to get a lawyer involved. An experienced debt settlement lawyer can help you decide when the time is right to make a settlement offer and can assist you in making an offer that the creditor is more likely to accept.