It is amazing how quickly credit cards can turn from being a wonderful way to get the things you need to being a terrible burden hanging around your neck. Credit card debt builds up gradually but can become a huge problem that can even lead to personal bankruptcy. Even if you can still afford the minimum payments on your cards, your debt will still continue to grow because interest is being added every month. If you are struggling even with the minimum payments, then it will grow even faster due to extra penalty charges.
The only solution to credit card debt on a large scale is likely to be negotiating a settlement with the card companies. It is very common to use debt settlement companies to deal with your creditors on your behalf, but the best route is negotiating credit card debt yourself, so that you avoid paying any fees for the service.
What you will be attempting to do is approach each credit card company that you owe money to and get their agreement to writing off a large part of your debt. Sounds marvellous, but why should any of your creditors agree to such a request? The only possible reason is if they believe that the settlement amount is going to offer them the best return overall. If a credit card company think you have got enough money to pay them but simply do not want to, they will take a different approach to if they believe you are in severe hardship and you might file for bankruptcy leaving them with nothing.
The main incentive used to reach settlements is the offer of paying the balance back in one go in exchange for a big reduction. Most people in a lot of debt are unlikely to have enough money lying around to make lump sum payments in settlement of debts, but there are other ways around this. When you use a debt settlement company, you stop paying creditors and save money up each month instead. This is then built up and used to settle debts.
If you have no experience of dealing with settlement negotiation before, it is highly unlikely that you will manage to achieve very good deals, simply because you will not understand how the system works. A good debt settlement negotiator would expect to get about fifty or sixty percent written off a debt, but this is only possible when you know what to say to the card companies and crucially, when and how to say it. The reason this is so vital is that each company will have their own procedures to follow in terms of how they pursue and eventually write off bad debts. You need to understand this in order to use it to your advantage.
There are many guides and publications available online which cover negotiating credit card debt yourself, but a lot of them are a waste of time. There are a few very useful good guides available, from detailed learning programs with one to one support, to more straightforward e-books. The best ones will tell you exactly what you need to do at every step of the process, including scripts of what to say on the phone and letters and forms to cover each stage of the negotiation.
Read advice on how to negotiate debt on the author's website, where you can also find recommendations for the most reputable debt settlement companies. K D Garrow has worked as a senior manager with significant financial responsibility for the last twenty years. His Debt UK/US website offers free, unbiased advice on a range of debt related issues, including the debt management plans, UK IVAs, budgeting advice, loans and bankruptcy.
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