Debt Settlement Negotiation – Tips To Get A Successful Credit Card Settlement

Successful credit card settlement is usually achieved by professional debt settlement negotiators

, but it is also possible to do it yourself. I wish to explain how both of these options work and what the pros and cons of each one are. I also hope to make it clear how debt settlement differs from other systems for paying off debt and what situations each one is most appropriate for.

When people seek professional help to get rid of debts, the option that most people end up using is debt management. This is often referred to as debt consolidation because it involves consolidating lots of different debts into one payment which is made to the debt company. This form of consolidation should not be confused with debt consolidation loans, which are where you borrow money to pay off all your debts, and then just pay off one big loan. Proper debt management does not involve any new borrowing, as this is rarely the best solution for debt problems.

With a debt management plan, the whole aim is to repay everything you owe, by renegotiating the terms and costs involved. For this to be viable you have to have enough spare income to afford the monthly payments on the plan. Where debt settlement differs from this is that it is all about writing off a large part of the principle debt and repaying the balance in one go. Debt settlement is therefore a more radical approach that is used by people whose situation is very serious. It is most suitable for people facing the prospect of bankruptcy or legal action. Debt settlement and debt management are very different services and are usually undertaken by different types of specialist company, though some of the large organizations do offer both.

If you use a debt settlement company to negotiate credit card settlements for you, they are likely to achieve a reduction on your debts of between 40 and 60 percent. This is mainly due to their experience and the fact that they have an intimate understanding of how each card company operates. This understanding is crucial in knowing how to time your negotiations and offers. The knowledge of each company's policy on treating bad debts allows them to know when to time an offer to get the best chance of the maximum discount.

One of the advantages of using a larger debt settlement company is that they have more leverage with the credit card companies because they are negotiating on behalf of lots of other people too. When they approach creditors, they can achieve bigger discounts because they represent the debts of perhaps a hundred people. The negotiation process can take from a few weeks to two or three years, depending on the credit card companies involved and other circumstances. While all this is happening you pay nothing at all to the credit card companies, but pay a regular amount into a new fund. This is saved up and then used as required to pay off each creditor as a settlement amount is agreed.

The alternative is to see if you can achieve a successful credit card settlement yourself, which lots of people do. Not all succeed in achieving much in the way of discounts but it is perfectly possible for you to get the same results as the professionals, provided you have the appropriate help and advice. You have little chance of success if you start off with no help, simply because it is not so much about being hard-nosed or a tough negotiator as about understanding the creditors processes. The advantage in doing it yourself is that you save on having to pay anything to a settlement company. The best organizations will only take a proportion of what they save you anyway, but this can still mount up.

There are lots of guides available on how to negotiate successful credit card settlement yourself, but you need to take care because many of them are a waste of time. There are several that have a good track record of success, ranging from comprehensive interactive learning packages with one to one support, to very detailed e-books. The best ones will give you everything you require, including scripts for telephone calls and templates for letters to card companies.

If you are considering using a debt settlement company, you need to be aware that they are not all as trustworthy or effective as their fancy websites might suggest. You can safeguard yourself by following recommendations for only the most reputable debt settlement companies, and then applying to a few of the them so that you can compare what you are offered before deciding which to choose.

Debt Settlement Negotiation Tips To Get A Successful Credit Card Settlement

By: Caleb Byron

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