Three FAQ on Credit Card Debt Settlement
Is there a legal secret to settling credit card debt?
While credit card debt settlement firms may assert otherwise, settling a credit card debt does not involve a legal secret.
A credit card account is a contract between two parties. That contract can be changed if there is agreement between the consumer and the credit card bank. In this context, the most important part of LEGAL is for the consumer to get the negotiated debt reduction and its terms in writing, according to the Credit Card Debt Survival Guide.
Can I settle my credit card debt while still making payments?
The short answer is NO. Banks will not settle with consumers who are not late in their payments. If they did, they would open up the floodgates to every credit card account holder seeking credit card debt relief.
As far as credit card accounts go, consumers fall in to two categories; those who can pay the monthly minimum, and those who cannot. For those who can pay and who want to settle for less than their full balance, they must risk not making their monthly payments and then banking that money for a lump sum settlement.
What percentage of the balance will a credit card company settle for?
On Web discussion boards, consumers report negotiating credit card balance reductions of 20 to 70 percent. Debt settlement teacher Charles Phelan reports credit card companies would rather negotiate with the account holder and not a debt settlement firm, and that consumers get the best deal of they do the negotiating themselves.
When approaching a bank for a debt settlement, a consumer must present a convincing case with low income, damaged credit and legitimate hardship issues. According to the Credit Card Debt Survival Guide, credit banks are mostly likely to settle for the lowest amount of money and may offer to settle right before the account charges off, which is usually around six months of arrears.
Discussion Area - Leave a Comment