Ara Betty is a freelance financial writer and speaker about personal financing. She helps people realize their goals on becoming debt free with the use of debt consolidation. She hopes to expand her knowledge more about loans and debt to be able to write a book.
It is possible to settle debts yourself or by using the services of a lawyer or a payday loan consolidation company. You may also choose the option of debt settlement so as to clear your loans. However, it is not always expected that the credit card company will agree to credit card debt settlement as a way to clear the debt. You need to be familiar with the circumstances that may be considered for debt settlement and those in which debt settlement will not be agreed to by credit companies.
Instances when credit card companies can settle:
- If you are almost bankrupt and you have been delaying on making the payments, but you are willing to make a lump-sum payment. Your credit card company will agree to settle in such a situation, even for half the amount owed, as this will be better than not receiving any money at all.
- If a debtor encounters hardships such as permanent job loss, the credit card company may agree to lower the minimum payment amount. This is if the debtor communicates with the credit card company and explains his or her situation to them.
- If you are a new credit card holder, the credit card company may offer to waive the annual fee that is due in the first year. To the credit card company, this can be overseen as they would like to retain you as a client.
Instances when credit card companies cannot settle:
- If you have been a card holder for a number of years, the credit card holder may not easily waive the annual fees that are charged to your account.
- If you have been in the habit of making late payments, your credit card company may hesitate to offer you a debt settlement agreement. This is because a new agreement will cancel the previous one, which was not being acted upon duly by you.
- If your situation does not justify the hardships that qualify for debt settlement, you may not benefit from getting credit card debt relief. The creditor will assess your situation and if it is found that you still have a steady flow of income and are able to pay off the amount owed after sorting your monthly expenses and utilities, you may probably not get debt settlement.
As you can see, filing for bankruptcy is not necessarily the best option if you would like to get out of debt. If your conditions are those that may be considered for credit debt settlement, approach your creditor and explain your situation to them. Be polite but persistent in your approach, as there is a possibility of your request being rejected. Debt settlement is a better option and solution to avoid having your credit score affected should you fail to pay amounts owed over a period of 180 days. Remember, you have got nothing to lose by making your request but you may stand to lose it all if you hesitate on getting credit card debt settlement. Keep your records well as this will enable you to have the numbers on the tip of your fingers and present your case better.