This is understandably tough to do but it can be done. Why would someone agree to accept your terms when you have not paid him or her anything in the past? Remember the old saying "Half a loaf is better than nothing". Well again, let's put ourselves in the seat of the original creditor. He sold you something that you failed to pay for. Here it is again later and you contact him. He has sent the account over to a collection agency and they have not had any results in collecting any money. Now when you make contact, in writing, you are planting a seed in their mind. They are saying to themselves "this guy has either come into some money or he needs something". Well they are partly correct. You do need your credit history addressed.
Let us now proceed to negotiate our debts. It becomes very simple. When you owe money, make arrangements to pay it. Negotiate – remember you are offering something they previously had little hope of collecting. You actually have some leverage in this case. Do remember that you only want to communicate in writing and NEVER on the phone.
Writing allows you to create a paper trail. Do not even try to the old "he said, or she said" scenario when negotiating paying bills. That simply will not fly. But, when you can produce in writing a record of an agreement and you can PROVE that you are making payments on your back debt, you are satisfying a lot of the requirements of the FHA in regards to obtaining a home mortgage loan.
Do not believe for one minute that debt simply dries up and goes away. Yes, there is a seven year time limit of reporting adverse information in your credit files. That is true. Can you wait seven years? This is important to remember if you're trying to get a home loan. If a creditor decides to take you to court and he is successful, the seven years flies right out the window. It now does not mean a
thing. You are now in a judging scenario. Do not take a chance regarding a back debt. Handle it NOW if you are serious about buying a home.