Credit Card Settlement
Steps to Negotiate a Settlement

What Does Credit Card Settlement Really Mean?

Credit Card Settlement negotiations can be used to reduce your overall debt substantially. It is a form of debt settlement which involves negotiating a reduced pay off amount to your unsecured creditors, card companies. Credit card Debt settlement is an alternative to bankruptcy, debt consolidation or consumer credit counseling once

How Credit Card Settlement Works

Credit card debt settlement or debt negotiation process used by people in credit card debt to negotiate a settlement of an existing legal debt. Typically the debt is reduced in regards to the principle balance. Any person owing credit card debt, or any other debt for that matter, has the legal right to contact and negotiate with the creditor. So put on your negotiating hat, take out the emotions and let's get started.

Steps to Negotiating a Debt Settlement

  1. Add up all of your Credit Card debts.
  2. Decide how much you have to work with to settle all of the debt.
  3. Generally you want to make sure you have at least 30-50% of the total balance due for settlement payments.
  4. Start the negotiations. Call each creditor one by one and negotiate a settlement.
  5. Once you have settled on an amount, obtain written proof of your settlement via a mailed or faxed letter.

Why a Credit Card Company Would Settle for Less
than what they are Owed

Creditors know that your next option is probably Bankruptcy. Creditors also know that going to court will most likely cost them more than the debt you owe. And in the case of bankruptcy, they get nothing. So it is in their best interest to get something from the borrower instead of forcing the borrower into bankruptcy where the creditor stands to either get very very little or get nothing.

Drawbacks of Debt Settlement

Debt Settlement is not a prescription without its side effects. Your credit rating will definitely take a hit. But once you have settled your debt, your stress level should reduce substantially. Then you are ready to get back into the game and to get a new start. That is what debt relief programs are all about. To give you some relief and allow you to make a new start.

Use this Calculator below to find out how long it will take to pay off your Credit Cards today if you do not negotiate a reduced settlement.

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