How To Settle Your Credit Card Debt?
Posted March 7th, 2010 in Debt Settlement.
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You usually have to be severely delinquent before creditors will consider settling with you; we’re talking close to 6 months behind in many cases. So please realize that you pretty much have to trash your credit in order to settle…but it’s probably better than bankruptcy. You can try to negotiate settlements with creditors yourself, or you can hire a company to do it for you. It does seem that creditors are often more cooperative with settlement companies than with individuals, but you also have to be careful because there are a lot of scams in the debt settlement industry.
March 7th, 2010 at 11:54 pmPay.
March 7th, 2010 at 11:54 pmIt depends….is this for a card that has completely defaulted/charged-off….or is it past due but still an active account?
- When a credit card is charged-off as bad debt, you need to understand that the damage to your credit is already done and there is no undoing it. Don’t make the mistake of simply cutting a check to whatever collection agency has the debt for the charge-off and assume that your credit rating will be magically restored…Doing so will not remove it from your credit reports. It will simply be updated to a "Paid Charge-Off," which, while slightly better, is still a seriously derogatory item. Per the Fair Credit Reporting Act, a charge-off, whether paid or not, can remain on a consumer’s credit reports for up to seven years.
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Credit card companies don’t settle on current accounts. You have to be several months behind in payments before you can start trying to settle. If it’s more than 4 months past due by not yet charged-off, offer 50%
Get all terms of any settlement deal you reach with debt collectors IN WRITING BEFORE you give them your money. This letter should state the settlement amount and that the account will be “paid in full” upon receipt of this amount from you. Keep the letter in a safe place. Never accept settlement deals over the phone that are not backed up in written terms. If you don’t, the debt collectors will deny that any settlement was ever made once they get your “settlement” money and will come back demanding more money from you.
March 7th, 2010 at 11:54 pmUnfortunately you’re just going to have to pay it. I had a credit card w/ a limit of $500 that I maxed out and let another $700 acue in interest. I ended up having to pay $1200 to a lawyer because I let it go for almost 3 years and it caught up to me when my parents back home got a letter from the Court saying I had to appear for settlement. It was crazy, I’m only 21. I’m not going to court and I am studying to be a teacher. So I got ahold of the lawyer they hired and worked out an agreement to pay in 2 payments. I paid the $500 straight up the next day in a check (since it was the entire credit card) and then exactly one month later I went ahead and paid the rest of the balance off. That was it.
March 7th, 2010 at 11:54 pmHire a company, make sure it’s a law firm… it’s the easiest and least stressfull way to go about settling your debts, it costs a little more money than if you do it on your own, but from personal experience I know it’s worth it!
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March 7th, 2010 at 11:54 pm