I received a letter from a law firm who says they represent Capital One. This is the first letter I have received from anyone after Capital One sent me the bill and said they were turning it over to a collection firm. This letter gave me 30 days to dispute deby etc. and wants me to contact their office. I want to negotiate a settlement for this debt, but don't know if I should call this law firm or the original creditor, Capital One. And typically what will they settle for?

The original creditor turned it over to the collections so you would contact them or the number on the paper.
You can offer them the principal and see what they say but most likely they already have a higher figure in mind and won't budge off that. Also they will most probably demand the amount in full and not give you a payment option.

Actually, you can settle the debt for a lot less than you the principle is. This can be tricky though. You need leverage. So the question is, "what kind of leverage do you have?"

Have you recently been in some sort of financial hardship? (loss of job, reduction in income, medical expenses, etc)

Also, are you an "employee" or someone? Or are you self-employed or on a fixed income? If you're self-employed or on a fixed income, it is almost impossible for them to garnish your wages so their odds of actually collecting is less, if they are unwilling to work with you and they decide to sue you.

Do you own a home? If the answer is no, they have nothing worth putting a lien on in hopes of collecting, should they decide to work with you... another reason why they should be more inclined to work with you.

They will usually always come off as unwilling to budge... but that is their job.

If it were me, I would state my position then low-ball them. If they were unwilling to settle, I would say fine... call you back in a few months when you might be more willing to work with me.

But you have to be careful... if the amount owed is a large amount, they may be more inclined to sue, if they think they have a good chance of collecting from you.

On the other hand, the more they return uncollected debts to Capitol One, the less Capitol One will refer bad debt to them.

Yeah real tricky.
Once you get to court they are a little more willing to talk principle or less. Before that they want to demand and not knowing the tricks they WANT as much as they can get.

And if you do get them to make a reasonable offer that you are willing to accept, MAKE SURE you get it in writing first!! I can't stress that enough!

After all... they ARE lawyers ;) heh

I dealt with them after my divorce and they settled with me for the amount. If they tell you that they can't just tell them tough cookies. It's their job to try to get the full amount as quickly as possible, and a lot of the people you talk to who do this for a living get lied to and wind up being intolerant. Just be square with them and don't take ANY crap.

If they harass you look their toll free number up on here.

http://800notes.com/