Credit Card Debt Relief Options - How To Legally Avoid Paying Back Unsecured Credit Card Debt

Credit Card Debt Relief Options - How To Legally Avoid Paying Back Unsecured Credit Card Debt

There are multiple credit card debt relief options and the best thing about these options is that they are all legal. However, the best among all these methods is the method of debt settlement which eliminates the debt of the consumers by at least 50% and often up to 70% without hampering the credit score of the consumer. When the settlement is over, the credit history of the consumer becomes clean and the consumer is looked upon as a prime consumer.

In order to legally avoid paying back unsecured credit card debt, it is necessary that a consumer must have an overall credit card debt of $10,000 at least. Also, it is necessary that the consumer takes appropriate measure to collect the debt in one card instead of leaving it spread over multiple cards. When the debt is spread over multiple cards, settlement process cannot work and even if it works, the time and cost will go beyond expectations which is not a good thing.

The consumers are always advised to select a settlement firm for the purpose of negotiation with the creditor. The reason for such an advice is that the settlement firms are professionals and their negotiators dealing with the creditors know exactly how to approach and what to say. They know how the banking system works and they know what to say to the creditors to make the creditors agree for settlement deal.

When a consumer hires a firm, the negotiator from the firm takes over and advises the consumer to go delinquent. Upon delinquency two things happen. The creditor gets the message that the consumer is not going to pay any more and that the creditor decides to hire a collection agency for debt recovery. The delinquency of the consumer is supported by a letter from the negotiator which informs the lender that the debtor is not in a position to repay the credit card bills in full and that consumer is looking for a settlement.

The creditor decides to wait for 3-4 moths instead of immediately handing over the debt to a collection and when during that period there are no payments from the debtor, the lender hires a collection agency. The rate at which the lender agrees to hire the agency is a loss for the lender because the collection agency retains 70-80 cents per dollar retrieved from the debtor. At this point, the creditor receives a call from the negotiator or the later visits the creditor directly and offers 30-50 cents per dollar on the condition that the remaining is eliminated.

A threat of bankruptcy is used by the negotiator to make the lender agree to the offer and once the lender agrees, a new agreement is signed between the lender and the borrower. The borrower then repays the remaining amount of the credit card bill either in bulk or over 6 months.

With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won't have to pay a fee unless your debts actually settle.

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