The Truth About Debt Settlement Percentages

Settlement PercentageSETTLEMENT PERCENTAGES AND WHAT TO EXPECT. I’ve been in the debt negotiation industry since 1998 and have worked with one of the premier debt negotiators, Paul Killmar so I am well acquainted with the debt industry and what to expect from the negotiator. The truth is, the settlement percentage that is the industry standard runs between 43% and 45% of what is owed.  That is the average settlement percentage.

Now, you will get these incredible settlements where the percentage is 7%, which was one we got for a $35,000 debt, but those are very, very rare.


Part of the settlement percentages have to do with the cash-flow needs of the banks and credit card companies.  If they are cash light, they may be willing to settle for a lesser percentage.  For instance, Citibank is having a hard time and they are now more willing to settle credit card debt for about 20% less than they had before.

MBNA use to give good settlement percentages, then in 1999, they settled for around 60%, but more recently, they have lowered their settlement percentages to around 40%.


I give you this information so you know ahead of time what to believe from the sales person.  Sometimes, it is popular to talk about the 1 credit card that settled for a very low amount and act like that is the norm of the banks and credit card companies.  It is not.

Just beware of the eager sales person and know ahead of time what is true and what isn’t.  Then, you can better judge the Debt Negotiation company.

I’ll bet that there are some of you who would like to see something a little more specific.  And, I believe I have just what you’re looking for.  I have posted samples of real settlement letters from actual settlements we’ve recently done for our clients.  (Only the names have been changed to protect the innocent.)

To see them,CLICK HERE.

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8 comments on “The Truth About Debt Settlement Percentages
  1. DougJoyce says:

    It’s very true. I speak to many people who call us up looking for help. It’s unfortunate that people wind up in a position where they wouldn’t be able to pay off their credit cards, but it happens everyday. Life is what it is, and often times a person can find themselves faced with a life-change that they were unprepared for. Someone can lose a job; a plant can close down; a family member can become very sick or even worse.

    No matter the unforeseen circumstance that befell them, the person wants to pay back everything that they said they would- even if it is unfair to them. Making a decision on how to handle something like this can be more emotional than anything else. That’s why people like me are here- to listen, to guide, to help and bring a little hope into a scene that has otherwise been a little bleak.

  2. Mark Baldwin says:

    I think that the biggest issue in regards to credit card debt is deeper than what is seen on the surface. I believe the problem is actually as much emotional as it is financial. Where there is overspending, not only is there a money gap, but an emotional one as well that needs to be addressed Just my .02

  3. Doug Joyce says:

    Hi Faustina,

    Great question! The truth is that what a credit card can be settled for will vary from one day to the next.

    Why’s that?

    “The economy” is not going to have a significant effect on what they will be willing to settle for. What really matters is how much cash they have on hand. If they are light on cash at the moment, then they are going to be more desperate to take settlements- any settlements. This is one of the primary reasons why professional negotiation companies save people more money than if they had tried to negotiate by themselves. A professional company will have a good familiarity with the various credit card companies, and will know when the best times to strike are.

  4. Doug Joyce says:

    Hi Faustina! The economy is actually helping us. The amounts that we can save you through negotiation can vary- depending on how badly credit card companies need money NOW. If a company light on cash, they will settle faster, and for lower amounts because they can’t afford to wait.

  5. Faustina Bavier says:

    Has the economy made the banks want a higher percentage? Or are they willing to settle for less because more people are having debt problems?

  6. Dick Stein says:

    I have been visiting this site for a couple of days now and i’m really impressed with the content. Thanks.

  7. Ferdin says:

    Jeez. That 7% settlement sounds very good.

  8. Calla Gold says:

    This is a good bit of factual info that will help someone not get suckered in by bogus hype from a disreputable company.
    I know Doug Daniloff, the owner of this company who has helped a lot of people. This kind of information and shedding light on an area that is difficult to confront is typical of him and his business model.
    Thanks for that.

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