Unsecured debts include medical bills, credit cards, department store cards, personal loans, collection accounts, deficiency balances remaining after foreclosure or repossession, and bounced checks.

An unsecured debt is a debt where there is no collateral. Unsecured debts include medical bills, credit cards, department store cards, personal loans, collection accounts, deficiency balances remaining after foreclosure or repossession, and bounced checks. 

There are a few creditors who will never compromise, but most will take a less-than-full payment as settlement-in-full, but make sure you get any settlement in writing. You have the natural advantage in debt settlement, because you have something the creditor wants, and you must hold out for your terms until the creditor gives you what you want. But once you've written that settlement check, your advantage disappears. 

Get the debt settlement terms in writing, long before you even consider sending a payment. Everything must be in writing and, even then, you will likely have some work to make the creditor live up to their end of the bargain.

Getting any penalties and additional interest removed or reduced should be your first goal in negotiating on the debt. Most companies would agree to you paying the original debt, even without the extra penalties, and will often be willing to waive these fees, just to get some money paid. As long as you have made no payment or agreement to pay, time is on your side. The longer the debt remains unpaid, the better your chances will be of getting a good settlement. Eventually, the creditor will have to consider the bad debt a loss in order to receive a corporate tax write-off. This does not necessarily mean that they won't pursue you for the debt. The corporation may then collect on the debt themselves, sell or assign the debt to a collection agency, press for a judgment and garnishment, or temporarily ignore the debt. The course of action chosen by the creditor will vary widely from corporation to corporation and debt to debt.

If you are contacted by more than one collection agency on the same debt, it may mean that the original creditor has retained a secondary or even third collection agency. This may indicate that the original creditor and perhaps the first collection agency have given up their collection efforts. A collection agency agreeing to take this bad debt at this stage will likely insist that the original creditor pay a fee (usually 50%-60% of what is owed). Many of these collection agencies will in turn accept 33-55 cents on the dollar, and if the collector has been unable to contact you by phone, but knows that you are receiving their letters, they may be willing to take even less.