Paying off old debt is very crucial. It can become tough if not given the required importance at the right time. Old debt has astonishing effects on people’s lives and also becomes a burden for the entire family. Old debt, otherwise known as bad debt, has accumulated and is not currently settled by you. The US reported that almost 28% of Americans have at least one obligation in collections. Paying off old debt can be difficult, but it can easily conquer when you followed the right strategies.

Key Points:

  • Old debts are debts that you are not currently paying on
  • 28% of Americans have at least one debt in collectors.
  • Being aware of your debts and listing can help you work faster towards clearing the debt.


In November 2020, the US reported a rise in consumer debts by 4.4 % than the past year. Old debt is a huge disadvantage for your credit history, and thus you need to prioritize it to pay it off.

The first and foremost step to clear your debts is to be well aware of how much you owe people. You must have this knowledge, which helps you with other efforts and strategies to pay the debt. It is essential to settle the debt on behalf of a family member, in most cases, the father’s debt. Also, since it is debt that you have not been paying currently, you may not remember the details. Thus it is all the more vital that you sit down and get all the insights into your debts.

Old debts will have accumulated interests. You also should be aware of the people to whom you the money as this will help in negotiation. Being aware of old debt helps make it a top priority, all the criteria required to fight it off and succeed.


The next step in clearing your debts is listing your debts. Once you are aware of your obligations, it is prudent that you list it all down. It can give you a better idea of how much you owe the people and help you develop plans. Keep the list where you can frequently see it, and thus it becomes a reminder and your priority.

Once listed, you need to negotiate with the collectors. Most collectors agree to buy off old debt in a much- reduced amount than the original ones, such as 60% or 75% of the actual debt. Most people go with half of the amount they owe, that is 50%.

You satisfy the collectors with even this as they view your old debts as an income. Also, you must make sure to contact and negotiate one lender at a time. Using your list, tackle your debts one at a time. Trying to pay off multiple debts at once can also have a negative effect. It will not help clear obligations ultimately.

Quick Fact:

 “33% Americans were threatened by their collects about their old debts.”


When negotiating with your lenders, you can conclude the amount you need to pay, and you can also determine the duration you have. Once you negotiate, you need to plan your strategy on how you will pay off the debt that you are focusing on currently. You should tackle the smaller debts before trying to pay off debts with massive amounts. Clearing smaller debts is more comfortable and takes less time. It helps you cross off things faster in your list, which can give you a sense of achievement. It boosts you to work harder on paying off your other debts as well.

You can also consider other methods where you can have people to advise and build strategies for you to clear your old debts. Approaching a credit counselling agency or declaring bankruptcy helps you deal with old debt and also begin afresh.

Another important factor in paying off old debt is getting a written agreement about the settled debt. It is proof that you have paid off your debt and can avoid future lender problems. In 2018, in the US, the CFPB reported that they had received complaints from 33% of debt holders that collectors threatened them( Thus the written agreement can be very crucial, and keep multiple copies of it in your record.


Avoiding debt to accumulate in the first place is better than working on paying it. But some circumstances lead us to such situations. Working to clear debts can take a lot of time, but it will be worth all the effort when you make a list.

The important thing that you need to be careful about is avoiding such situations in the future. You must always be cautious in your spending and make sure to pay your bills on time. It is not still possible but when you get your money, pay off overdue bills before anything else. It can help out a great deal to avoid such situations in the future.

Thus be aware of your expenses and if working on old debts.

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