subject: Negotiate Credit Card Debt – The Best Way To Eliminate Credit Debt [print this page] Negotiate Credit Card Debt The Best Way To Eliminate Credit Debt
The weight of credit card debt can seem insurmountable and many uninformed consumers prematurely declares bankruptcy without attempting to negotiate credit card debt settlement with their creditors. Of all the possible options, this can potentially produce the greatest benefit and reduce the most amount of debt. Don't get me wrong, it is not going to be easy (in fact far from it); but being knowledgeable of what's at work and with enough perseverance, walking out debt free can become a distinct reality.
Before you do anything you would need to first figure out who is collecting the debt and whether or not it is in collection. Just call your credit card company to find out. The debt can either be with them, which is more desirable, or been sold to a collection agency. Once in collection, the credit card company is no longer relevant and you are dealing exclusively with the collection agency. Your credit rating is also going to take a bigger hit with minimum two negative marks.
If the debt is still with your credit card company, you can contact them directly by phone to negotiate a settlement. Again, the credit card debt negotiation most likely will be tedious with a lot of back and forth. From your creditor's perspective, he would rather settle to receive a portion of the balance than to force you into bankruptcy, in which case he receives nothing. At the same time, he will not settle if he believes that you have enough possession and income to pay back the debt. By that logic, your credit card company will not be negotiating credit card debt unless enough time (60-90 days) has elapsed since your last payment.
The situation is a bit more sticky with a collection agency, but not as bad as you might think. True, it will be more difficult and frustrating to negotiate credit card debt with them, but you also hold several advantages. First, your legal protection becomes more expansive when in collection and it will be difficult for the collection agency win a lawsuit. Second, collection agencies pay only a fraction of the cost for your debt: usually only 5 cents on the dollar (your credit card company sells them to debt collectors and receives tax benefits). Therefore, it's not hard to see that they would be willing to negotiate credit card debt settlement for say 25% as that would still be a profitable transaction. The most crucial step is to negotiate how your credit rating will become and ideally you want complete removal of the listing for collection. And as you might expect, they will not go down without a fight.
