Some Suggestions In Regard To Settling Credit Card Debt
If one takes the time and puts in the efforts necessary, settling credit card debt by themselves will probably save them a substantial amount of money. There are some things that one should know and keep in mind as they begin this process.
In most situations, the things one will be working on negotiating will be loans and debts that are unsecured by any collateral. This would include things such as credit cards, medical bills, retail store cards and education loans for example. It is vitally important as one gets started that they establish whether or not they are dealing directly with the company to whom the debt is owed, or if that company turned things over to a collection agency for debts.
Dealing Directly With Credit Card Companies
Once one knows that the account is still held by the credit card company directly, and it is they who have been persistently hounding one to collect the money owed, a person has the opportunity to settle things directly with them.
The first thing one should know is that unless the account is at least over 90-120 days past due, the company most likely would not consider settling anything. But if in fact it has passed that 90-120 day range, one can contact the creditor and make an offer to agree on paying a balance off at perhaps a reduction of 50% or so of what is actually due.
One should be prepared to be patient with the person they are dealing with because these folks are trained to be focused on collecting money, and often they are not interested in debt settlement conversations. One must calmly and simply explain that they are not in a position financially where they might pay the total amount that is due.
At this point, saner heads on their end begin to realize that their interests are better served receiving something of what is due rather than zero should one decide to go bankrupt.
Once a number has been agreed upon, it is important to get that in writing. One must be certain they can afford to meet that number, or if not, negotiate a settlement plan perhaps over a several month period.
Dealing With An Agency For Debt Collection
In most cases, instead of negotiating on the phone as with the credit card company, it is better to write to the debt collection agency one’s personal information and the amount that is owed. Send everything registered mail so that one will have receipts for everything.
A person should understand these agencies will usually settle for small percentages of the money owed, so they should begin by offering perhaps 10% of the total due and go from there.
Once a number has been reached and one is ready to pay off debts, the final thing to be secured is their promise in writing to advise the credit rating bureaus that the case should be referred to as “settled” rather then as a “paid collection”. This will have a more positive effect on a person’s credit rating moving forward.