When negotiating the terms of the settlement, make sure you cover all the important terms:

• How payment is to be made.
• When payment is to be made.
• Where payment must be sent.
• That payment does not constitute admission of liability for the debt.

That the agreed settlement is in full satisfaction of the debt.

In addition to the above terms, it’s important to consider the credit reporting implications, and to address them. After seven years most debts may no longer be included in your credit report. Be aware that paying a debt can "re-start the clock" for reporting purposes, so if your debt is several years old, you will want to negotiate how the debt is dealt with for credit reporting purposes.

It makes sense, therefore, to require that the debt be reported as "deleted" to the credit bureaus as a condition of the settlement of the debt. This will ensure that the debt is not essentially "re-aged" by your settling the debt. If you are unable to get the collector to agree to simply report the debt as "deleted", insist that it be reported simply as "paid" with no further wording, such as "paid-charge-off" or "paid collection".