There is no sense to hide the fact that debt negotiations are harsh. Just the process of receiving of letters can scare you to death with the fear and stress. It is the stress they would like to provoke in order to never give you any discount.
Now we come to the one of the unknown secrets of how banks and debt collectors work. The fact is that in case of receiving even a part of the debt they count it as success. So if your creditor sold the debt to a collection agency for a fraction of its value any payment higher than this amount is pure profit.
First of all you should forget about the image of the debt collector as an evil ruler. Consider your interaction with them as a business transaction similar to purchasing used car on craigslist.
The very first thing you have to do is that until you receive the signed paper confirming your deal with debt collectors do not pay anything at all. Verbal statement does not matter in this situation. If they refuse to send you anything by email or mail just forget about them.
Your first offer has to be completely ridiculous. Offer to pay only 30% of what they ask for example. Of course, they will be laughing or even offended. This is the tactic to make you pay more.
When making your offer try to use specific odd amounts. For example if you offered to pay $300 to your creditors you can offer them $437. Odd amount seems to be much more believable than the round amount.
In no way provide them with direct access to your bank account. Ever. They can just clear out your account as soon as you provide them with all needed information. Always use cashier checks or prepaid debit cards to pay your debts.
Please note that settling of the debt has tax consequences and you may have to consult a professional regarding your taxes after this.
The process of debt negotiation is a quite frustrating procedure. You will receive lots of hang-ups from rude people with headset. Do not take it personally. It is just their frustration that they cannot achieve desired results during this call.
Always keep a notebook near you to write down everything they say. Try to become a pain in the neck for them. At last they will accept your proposition just to avoid further talks.