Sometimes, paying debts off can be overwhelming and large amounts of money can be extremely difficult to pay off. While a credit card settlement company can help by negotiating on your behalf with the creditor, this can be dangerous as some companies are scams and will take your money without doing anything. This can leave you in an extremely difficult situation.
However, you can negotiate with a creditor yourself. That will save you money which can be contributed towards paying off your debt. To help you with dealing with creditors, below are some suggestions that can aid in coming with a beneficial settlement.
Contact the billing department at your Credit Card Company and request to speak to someone about a credit card settlement. Ensure that you explain your financial situation has changed and you will be unable to pay off the full balance. Some companies may be co-operative and open to discuss a settlement. If they are not, mention the possibility of being forced to file for bankruptcy.
A credit card company will not receive a payment and would rather settle a debt for less than the full amount than lose the debt in a bankruptcy file. Discussing bankruptcy may persuade the representative you speak to, to talk about an arrangement.
As a credit card settlement can encompass all aspects of debt, you should ask to include the removal of any late payment notations on your credit file. Ensure that you request for the paid off balance to be reported as “paid” instead of “settled”, as this will prevent future lenders from seeing you as a high-risk borrower. Alongside this, ask that any remaining balance of the debt is not to be sold to a collection agency.
This will negate any efforts made to come to a settlement and extra charges will be placed on top by a collection agency. They can also place a negative notation on your credit file, which can seriously damage your credit score.
Make sure that you get the agreement in writing. This will ensure that if there any mistakes made on behalf of the company, you have recourse to remedy the situation. A verbal agreement is not legally binding and you will be unable to convince the credit card company to adhere to the original settlement.
Offering a lump sum can grant you greater leverage when negotiating a credit card settlement. If you can afford one, it will ensure that the credit card settlement will get paid and avoid a default.
If you are able to successfully secure a settlement with your credit card company, it can be beneficial for your credit score as defaults can have a serious negative impact. Various services online can provide information and support about how to continue improving your credit score and how to better manage your debts.
They can also offer you 24/7 access to your score to give you a better understanding of your finances as well as your credit rating.