Credit Card Debt Settlement

If you’re like many other people struggling with the current economy, you may have suddenly found yourself bound with credit card debt. This is easy to do if you’re trying to survive with little or no income. If you’re barely able to make your minimum payments, or you’re missing them and incurring late fees, it’s time to take action.

There are four varied plans to getting help from your credit card company, and they are explained below. Each of these options requires a credit card hardship letter.

Option 1: Credit Card Debt Settlement
This route is not available to many because it necessitatesthat you have significant savings that you can use. The idea is that you negotiate with your creditor to take a fraction of your debt and to forgive the remainder.

For instance, you may owe $15,000 on a credit card, so you convince the lender to agree that you’ll pay them $8,000 if they forgive the $7,000 remaining. They would write off the $7000 as a loss for their business.

The reason this might be appealing to your creditor is that if you are struggling this much, you’re most likely teetering towards bankruptcy, in which case, they would not get anything. Better to get $7,000 from you than $0.

However, in order for it to be a viable option for you, you need to have money sitting there to give them, as soon as you reach a resolution. The lump sum amount you agree upon can be anywhere between 25-60% of what is owed.
The other downside so the settlement option is that you will owe taxes on the portion of your debt that is forgiven. The IRS views this as regular income, and as such you will have to pay tax on it.

Option 2: Negotiating a Lower Interest Rate
If you have made payments reliably up until very recently, then this could be a great option for you. You will need to detail your hardship, and convince your creditor that you will be able to make reduced payments. However, when creditors lessen interest rates, the payments can be decreased quite noticeably.

In addition to asking a lower interest rate, you can also petition tha the creditor forget various fees that have been charged to your account, particularly any late payment fees. While some companies will agree to this and others have policies against it, but there are no consequences for asking.

Note:I can help you pursue this option by compiling your credti card hardship letter.

Option 3: Negotiating a Payment Plan
This option is best for you if you don’t have a good payment history with your creditor, strangely enough. If you’re few months behind in your payments, and are certainly struggling, your creditor may be willing to work with you to compile a payment plan that accommodates you.

Again, if you’re already suggesting that you are a credit risk, they would rather get something from you than nothing, so they’ll be antsy to create a plan that works for you.

Option 4: Having a Professional Negotiate on Your Behalf
If, for whatever reason, you can’t choose which of the above choices are a good fit for you, you can turn to a professional to take on your case and negotiate with your creditor on your behalf.

There are inummerable credit card counseling services. Simply you are confident that the company you decide upon is legitimate and reputable. As with other financial situations, there are plenty of scams to avoid.

Note: Even if you work with another company, you may be asked to create a credit card hardship letter explaining your struggles. I can write it for you.