subject: Credit Card Debt Settlement – Is It The Best Form Of Credit Debt Relief? [print this page] Credit Card Debt Settlement Is It The Best Form Of Credit Debt Relief?
There are many different types of credit debt relief, and credit card debt settlement is just one of them. It's the type of credit debt help that is specifically tailor made for debt over $10,000, and for people who have already fallen into arrears with their payments.
One thing a lot of people don't realize is that credit card companies prefer you not to settle, or to pay off your debts early. They want you to stay in debt for as long as possible, because they make money off the interest. So if you owe $10,000 and you are able to make the minimum payments, the company won't consider debt settlement. Why should they? They are getting their money. They are perfectly happy with the fact that, depending on the size of your debt, it could take you thirty years to pay it off.
It's only when you are not able to make your payments and they realize they stand to lose everything that they become amenable to negotiation. First, of course, many will try to harass you and terrify you into paying. However, if you do not have the money, that tactic will not work. Creditors will not tell you this, but they want to avoid forcing you into bankruptcy at all costs, because they will lose everything. So even though they might be harassing you to make minimum payments, they will probably be open to negotiation.
However, they will usually not negotiate with individuals. With credit card debt settlement a company providing credit card debt services will represent you and do the negotiating on your behalf. Debt settlement companies bring a lot of business to creditors, which is why they can successfully negotiate for you. If your debt is $10,000 you should end up paying no more than $6,000, and the repayment schedule should take a maximum of three years.
It's important to know that until your debt is settled, you may be vulnerable to being harassed by debt collectors so you need to be prepared for that. The other important thing to know is that your credit rating will be negatively affected. But if you are in arrears with payments, it has already been affected, and it's vital that you find a solution to your current financial crisis. In time your rating will improve again.
Besides, now is probably not the time to be thinking about getting more credit. Now is the time to find a way to eliminate credit card debt, and possibly change your spending habits so that you do not have to put yourself through this again.
Whichever company you approach, always make sure you ask a lot of questions and get clear answers to them. Also make sure that you thoroughly understand how they operate, when your debt will be paid off, what the negative impact will be for you as well as the positive. Get everything in writing, always read all the fine print, and never ever make an impulsive decision, especially on the phone. You want this to be a solution for you, not something that creates more problems because you didn't ask enough questions.
