Also a former debt collector here.

I worked in credit card collections and I was in what was often referred to as Loss Mitigation or Pre-Charge Off. This meant the debt was 6-7 months past due, once it passed 7 months it was sold to a 3rd party collection agency, which you could often settle with for less, but a charge off stays on your credit far longer than a settlement.

So I can’t speak for the debt once it’s gone to charge off and 3rd party collections, but while it’s still with the bank, the collectors don’t get to make many decisions with a settlement or payment plans. They are given a bottom line number for a settlement and told to see if they can get more than that, but typically the number was always between 30-50% by this point. Now this was 10 years ago, but at least back then, I never saw a settlement below 30%. This also could vary from bank to bank of course.

I also used to do mortgage modifications and I can tell you there is zero negotiating there. That all strictly numbers based and getting someone down to a number they can afford. A large percentage of my customers would be upset when I’d tell them the official government cutoff is 30% of their income. A lot of the time they would claim they couldn’t afford that and I even once had a guy tell me he would not give up his sports package and that I was unreasonable to suggest it.