subject: Credit Card Settlement Tips - How To Legally Settle Your Credit Card Debt For Less [print this page] Credit Card Settlement Tips - How To Legally Settle Your Credit Card Debt For Less
Legally settling credit card debt for less has become quite widespread. This is done by the method of debt settlement where the consumers need to hire a professional debt settlement firm for the purpose of negotiation. The basic requirement is that the consumers need to be in huge amounts of unsecured debts. Here the huge refers to at least $10k of credit card dues.
Settlement will ensure that the consumers do not lose their credit score and that they remain prime consumers even after their debts are wiped out. The method of settlement utilizes the threat of bankruptcy to force the creditors to agree for the offer. This is to be professionally done and hence the consumers are advised to go for professional help instead of using self negotiation.
The negotiator from the settlement company advises the consumer to stop paying anything, even the minimum amount due to the creditors and the creates a repayment plan and intimates the creditor that you will not be able to repay the debt in full. The creditor has no option but to wait for 3-4 months after which the creditor contacts a collection agency for debt recovery. The agency agrees to pay only 20% and a maximum of 30% of the total amount collected to the creditor.
This is where the negotiator contacts the creditor and offers 30% to 50% bulk repayment and also threatens the lender in a professional way that you will go for bankruptcy if the lender disagrees. The lender actually agrees to the deal and waives off the debt by at least 50%. This is how you legally settle your credit card debt for less.
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.
