How To Settle Credit Card Debts
Ever hear your friends or family members talking about how they were able to pay off their debts for less than they owe? Wondering how to do the with what you owe? When you hear these stories, you may wonder if this is really possible. Well it happens, and it is possible, and we will explain how to settle credit card debt.
Essentially, a settlement is when the creditor allows you to pay the loan back for less than you owe. Thus, if a debtor owed $6,000 and they offered the debtor a fifty percent settlement, the debtor would only pay $3,000 in order to wipe the entire debt clean. After you pay this amount, the rest of what you did owe is forgiven and you do not need to pay any more money. Your credit report will then say that the debt was settled. That is credit card debt in a nutshell, but lets go further into how to settle what you owe.
Settlement Requires Commitment
Most creditors are not willing to extend this offer to people if you are not behind on your monthly payments. If you are faithfully making the minimum payments each month, the credit card company enjoys receiving that money and has no real incentive to forgive your debts.
They will typically not offer you a settlement in this scenario. Typically, they will only offer settlements to people who are behind on their payments and are a risk of walking away completely through bankruptcy or other alternatives.
If they suspect you will never pay your bill, they will be more willing to accept less money.
In some cases, you may be able to negotiate a settlement directly with your original creditor. For instance, if you owe money on a Capital One credit card and you are behind on your bills, you can contact them to see if they will settle for less than you owe.
Working With Collection Agencies
In most cases, however, you will have to get the settlement from a collection agency.
However, it is important to be a careful when making these arrangements with a collection agency.
Most bill collectors work on commission.
Thus, they want to collect as much money as possible. To do this, they may tell you that they can only accept something like an 80% settlement.
However, they may not be telling the truth. They may be trying to get more money out of you so that they can earn a higher commission.
However, the collector is also required to work under the guidelines that the bank has given them. For example, they may not be allowed to give a settlement that is less than fifty percent.
Unfortunately, it is very hard to discover when a collector is simply trying to get more money from you, and it is virtually impossible to discover what the lowest settlement a collection agency is able to offer you. It comes down to effective negotiating.
Usually, you will get a better settlement offer if you are working with a collector near the end of the month. At most agencies, their collection goals are set on a month by month basis. At the end of each month, most collectors are eagerly trying to reach their goals.
Thus, they may be willing to offer you a lower settlement just because they are desperate to reach their goal quickly. At the beginning of the month, they will be more aggressive in their collection strategies, having more time to pursue your debts, while at the end of the month, they will be more desperate. Their hurry to meet their quota works in your favor.
Getting Professional Help
Navigating the complex world of settlements can be difficult for many people.
To avoid this difficulty, many people turn to debt settlement specialists for help. These are professionals that know how to settle credit card debt at the best rates. These people can help you to negotiate the most favorable settlement that you could possibly get. They understand how to talk to collectors, and they do not let collectors bully them. They will negotiate on your behalf, and all their experience and skills are brought to bear for your benefit.
If you opt to work with a debt settlement company, you do not necessarily have to be behind on your bills. You can be on time with your monthly payments.
However, you may be tired of juggling too many bills, or you may feel that you are never going to get out of debt. The settlement company will show you how long it will take get out of debt, and then it will help you to enact the right plan.
What To Expect
Instead of paying your credit cards, you will be asked to send money to the settlement company. The company places that money in a savings account. They do not send any of it to the creditor. When the savings account has enough money in it, they contact the creditor to discuss your settlement options.
In the meantime, the creditor has not received a payment for the period you have been sending them payments and are typically more willing to offer a settlement solution to end your credit card debt.
If you have a lot of bills with collection agencies, you may wish to settle all of them by using a consolidation loan. This loan will cover all of the settlement offers that you have from your creditors. Then, you will be able to make one low monthly payment, and you will not have to worry about dealing with multiple bills.
When trying to figure out how to settle credit card debt, there are many options, whether you choose to negotiate yourself, hire a settlement company or work with a consolidation loan service is up to you. Simply keep focus on your ultimate goal, to eliminate your credit card debts and get the relief you need to get back on your feet.
Essentially, a settlement is when the creditor allows you to pay the loan back for less than you owe. Thus, if a debtor owed $6,000 and they offered the debtor a fifty percent settlement, the debtor would only pay $3,000 in order to wipe the entire debt clean. After you pay this amount, the rest of what you did owe is forgiven and you do not need to pay any more money. Your credit report will then say that the debt was settled. That is credit card debt in a nutshell, but lets go further into how to settle what you owe.
Settlement Requires Commitment
Most creditors are not willing to extend this offer to people if you are not behind on your monthly payments. If you are faithfully making the minimum payments each month, the credit card company enjoys receiving that money and has no real incentive to forgive your debts.
They will typically not offer you a settlement in this scenario. Typically, they will only offer settlements to people who are behind on their payments and are a risk of walking away completely through bankruptcy or other alternatives.
If they suspect you will never pay your bill, they will be more willing to accept less money.
In some cases, you may be able to negotiate a settlement directly with your original creditor. For instance, if you owe money on a Capital One credit card and you are behind on your bills, you can contact them to see if they will settle for less than you owe.
Working With Collection Agencies
In most cases, however, you will have to get the settlement from a collection agency.
However, it is important to be a careful when making these arrangements with a collection agency.
Most bill collectors work on commission.
Thus, they want to collect as much money as possible. To do this, they may tell you that they can only accept something like an 80% settlement.
However, they may not be telling the truth. They may be trying to get more money out of you so that they can earn a higher commission.
However, the collector is also required to work under the guidelines that the bank has given them. For example, they may not be allowed to give a settlement that is less than fifty percent.
Unfortunately, it is very hard to discover when a collector is simply trying to get more money from you, and it is virtually impossible to discover what the lowest settlement a collection agency is able to offer you. It comes down to effective negotiating.
Usually, you will get a better settlement offer if you are working with a collector near the end of the month. At most agencies, their collection goals are set on a month by month basis. At the end of each month, most collectors are eagerly trying to reach their goals.
Thus, they may be willing to offer you a lower settlement just because they are desperate to reach their goal quickly. At the beginning of the month, they will be more aggressive in their collection strategies, having more time to pursue your debts, while at the end of the month, they will be more desperate. Their hurry to meet their quota works in your favor.
Getting Professional Help
Navigating the complex world of settlements can be difficult for many people.
To avoid this difficulty, many people turn to debt settlement specialists for help. These are professionals that know how to settle credit card debt at the best rates. These people can help you to negotiate the most favorable settlement that you could possibly get. They understand how to talk to collectors, and they do not let collectors bully them. They will negotiate on your behalf, and all their experience and skills are brought to bear for your benefit.
If you opt to work with a debt settlement company, you do not necessarily have to be behind on your bills. You can be on time with your monthly payments.
However, you may be tired of juggling too many bills, or you may feel that you are never going to get out of debt. The settlement company will show you how long it will take get out of debt, and then it will help you to enact the right plan.
What To Expect
Instead of paying your credit cards, you will be asked to send money to the settlement company. The company places that money in a savings account. They do not send any of it to the creditor. When the savings account has enough money in it, they contact the creditor to discuss your settlement options.
In the meantime, the creditor has not received a payment for the period you have been sending them payments and are typically more willing to offer a settlement solution to end your credit card debt.
If you have a lot of bills with collection agencies, you may wish to settle all of them by using a consolidation loan. This loan will cover all of the settlement offers that you have from your creditors. Then, you will be able to make one low monthly payment, and you will not have to worry about dealing with multiple bills.
When trying to figure out how to settle credit card debt, there are many options, whether you choose to negotiate yourself, hire a settlement company or work with a consolidation loan service is up to you. Simply keep focus on your ultimate goal, to eliminate your credit card debts and get the relief you need to get back on your feet.
