Credit Card Settlement - How To Legally Stop Paying Credit Card Debt With A Settlement

A credit card settlement is also known as debt arbitration or debt negotiation

. It is a legal approach to debt reduction where a creditor (a credit card company) and a debtor (the customer) meet to settle the debt of the latter to a smaller amount of money than he initially owed to the bank.

The customer has the right to negotiate with the credit card company directly, if he considers he has both the necessary information and the negotiating experience to succeed in his attempt. He can also choose to sign a contract with a debt settlement company, which acts as a liaison in the negotiations between the client and the bank. Whatever option the customer makes, it is a legal and advised step towards financial freedom.

These kinds of settlements are encouraged by the American government, which developed a variety of programs to help the indebted customer pay his bills. The Federal government also offered stimulus money to the credit card companies to help them cover their losses that partially occurred because so many customers failed to pay them back on time. This stimulus package has created a positive environment in which the credit card companies have more incentives to start the negotiations with their debtors.

Therefore this credit card settlement is an unexpected opportunity for many people who are suffocated by their monthly payments. However, not all types of debts qualify for debt settlements.

To be able to settle your debt with the bank, you must meet certain criteria, such as: you must be over 18 years old; you must have a minimum uncovered debt of $7500; you must have a constant source of income from which you can pay your creditors the monthly amount of money agreed upon in the debt settlement agreement and you must have experienced a hardship.

It would be wise to not go directly to a debt settlement company but rather first visit a debt relief network. The top debt relief networks only allow debt settlement companies into their accredited organizations that prove a track record of successfully negotiating debts and have also been certified. They are free to use and offer helpful debt relief advice.

Free Debt Advice.

by: Erik Stump

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