Essential Ways to Settle Your Credit Card Debt

 
     
 
 
 
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Comparing Settling Your Debt To Filling For Chapter 7 Bankruptcy

 

Millions of consumers are struggling to pay off their credit card debts in the post recession US economy. The high default rate has pushed the people further in to debt, especially after the colossal financial collapse. In this situation, many debt stricken consumers are relying on debt settlement programs to eliminate their debts. When you are enrolled in a settlement program, you have to pay less than you owed originally. Therefore, it helps to make the owed amount easier for you to pay off.

 

1.     Avoid making payments on your credit card bills

The credit card companies will not accept your settlement offer if you are regular on your payments. Therefore, if you are keen to settle your debts then stop making payments on time. The credit card company needs to be convinced that you are unable to make payments before the settlement company can start negotiating on your debts.

 

2.     Avoid the threatening calls of the collection agency

Once you stop making payments to the company, it will be turned to the collection agency. You might receive threats of legal action or wage garnishment from the debt collectors. But remember that the debt collectors will avoid taking legal action due to the high expenses and effort required to file a lawsuit.

 

3.     Make a settlement offer

You should make an offer that you can afford otherwise you might end up in debt again. Make an offer that is lucrative to the credit card company or else it will sell the debt to the collection agency.

 

4.     Threat to declare bankruptcy

If you threaten the creditors to file bankruptcy then they might accept the settlement offer. As the creditors are aware that once you declare bankruptcy they will not be able to retrieve their money. 

 

5. Ask for a written agreement

Once you have negotiated and settled the repayment plan, ask the creditors to provide you with a written agreement mentioning the preset settlement amount. Make sure that the payment you will be sending to the creditor will help to settle your credit card debt.