While debt collection companies often have a reputation that is less than favorable, their main objective is to be able to collect the debt for their clients.
If you are making payments to a debt collection agency in lieu of making payments directly to the initial creditor, you may be able to make an offer of payment and eliminate the debt for far less than face value.
In some cases, the debt collection agency will make an outright purchase of the debt from the original creditor. When a transaction such as this happens, it is often done for a small percentage of the original debt.
For this very reason, the agency may be able to make settlement for much less than the actual billing shows.
When you are initially contacted by the debt agency, find out if they indeed own the debt or if they are working on behalf of the company. If they own the debt, try to work out favorable payment terms that will enable you to pay down the debt and save money for a future payment.
After a few months of payments, you may want to contact them to get a buyout number.
If the company does agree to a buyout, make sure it is in writing before making the payment. If this buyout is not in writing, your payment may be considered just another payment.
The overall debt may be decreased, but it would not be paid in full as you thought.
In addition, make sure the statement includes that the debt will be marked as paid in full upon payment of the buyout figure.
If the company is merely acting as an agent for the original creditor, you may want to contact the original creditor to work out terms of payment as listed above.
In fact, you may be able to get considerably better terms from them directly, as the middle point for selling a debt and your buyout price would be more lucrative for them.
As stated above, any agreement that comes about must be in writing to ensure your protection.