Maximize Business Value

Settling a credit card debt refers to getting a collection agency or creditor to accept less than full payment on the debt.  Settling a credit card debt takes time, patience, nerves of steel and a thick skin but once it is successful you can save thousands of dollars. To settle your credit card debt, consider the following steps:

Cease all the Credit Card Payments

Don’t make more credit card payments because companies cannot settle with someone who continues to make timely payments. Many credit card companies settle when they believe that if they don’t make some deal, they will not get a penny of the money they are owed.

Ignore Threats

Your account may be turned over to a collection agency that may threatening to sue you, garnish your wages and seize your properties. Ignore such threats because many agencies will not go to the effort and expense of actually filing a lawsuit.

Gather All Your Credit Card Bills

Collect all your credit card bills and assess the debts you have and the amount you owe each company. Find the total sum of all your debts so that you know where you are realistically.

Consider Your Income

According to your income assess the amount you can devote to your bills from your monthly pay. You should not consider the credit card payments only, but also put into consideration the auto loans, insurance payments, mortgage, utilities, food and miscellaneous monthly expenses.

This will determine if settling your credit card debt will work for you. If your debt is too overwhelming for your income, seek advice from a credit counselor or other professionals who are knowledgeable and experienced in this field.

Make an Offer to Your Credit Card Company

Many credit card companies settle debts for as little as seven cents on the dollar therefore make an opening offer of a maximum of 25 percent of the debt but do not make an offer you cannot afford.

Write a Creditors Budget

Write a budget of the amount you would like to pay your creditors and for how long. If you are behind most companies will agree to a settlement. Creditors will reduce your balance if you allow them to take automatic payments from your checking. Before you call your creditors, have in mind the amount you want to pay per month.

When you call you creditors the highest interest rate credit cards should be top on your list. Explain to them about your financial status and ask them for what you need.

Be ready to let the creditor take the amounts directly out of your checking on the date you have agreed to and for the amounts you agreed. Avail your checking account and routing numbers. Record your conversation and confirmation numbers.

Threat of Bankruptcy

As you negotiate, remind your credit card company that if you declare bankruptcy, the company may get nothing. This will keep them in the negotiation and eventually reach a mutually acceptable settlement.

Popularity: 50% [?]