subject: Credit Card Debt Settlement – How To Legally Eliminate Credit Card Debt [print this page] Credit Card Debt Settlement How To Legally Eliminate Credit Card Debt
When one's credit card balance gets to the point that it is impossible to make the payments and the interest keeps piling up it is time to think about a credit card debt settlement. This means negotiating with the credit card company to close the account and pay it off at a lesser amount than owed.
Credit card companies often recognize the warning sign when someone is not making payments and fears that their finances are in trouble and bankruptcy is imminent. They would sooner see some recovery of their money than lose it all. This reduction can be from twenty percent to seventy five percent.
Sometimes it can be worked out to pay this settlement over a limited period of time with set payments. This is called a work out plan. Anyone defaulting on these payments would cause the debt to go back to the original amount with possible court action to collect. A cash settlement, of course, closes the books and the account.
Usually a credit card company will not give an individual a very good deal on making a credit card debt settlement. A representative, such as a credit counselor or lawyer has a much better chance at negotiating a settlement. They may get it down to twenty percent of what is owed while the individual might only be offered seventy five percent.
A person who appears to be a bankruptcy candidate is the one most likely to be able to reach a reduction settlement with the credit card company. This is someone who has not made payment for several months on all debt obligations. This also applies to people who apparently have no assets.
In negotiating a credit card debt settlement all financial records must be revealed, including evidence of income, bank accounts, and bills due. The credit card company must be convinced that one is unable to meet their obligations.
