Commonly Asked Questions about Credit Card Debt Settlement
12:07 AM
Is there a legal basis to settle credit card debt?
There is no SECRET, despite debt settlement firms' claims, to legally settling credit card debt.
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 you settle a credit card debt without being late in your payments?
Credit card companies will only settle with those consumers who have missed monthly payments. If the banks negotiated debts with current account holders, most consumers would want to settle for less than the full amount.
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.
How much of a balance reduction do credit card companies usually settle for?
Online consumer forums have stories of consumers settling for as little as 20 and as much as 70 percent of their credit card account's original balance. According to credit card debt settlement expert Charles Phelan, consumers who settle on their own get the best settlements. Phelan also says credit card companies would rather deal directly with a consumer, rather than go through a debt settlement firm.
According to the Credit Card Debt Survival Guide, banks are most likely to settle for the lowest amount right before they write the account off as a loss. Six months after payments on an account stopped is generally when that happens. At this time it is common for a bank to approach the consumer with a settlement offer. Before this period, when a consumer in arrears approaches the bank with a settlement offer, the bank wants to see evidence of need such as low income, job loss, family death, illness, etc.
There is no SECRET, despite debt settlement firms' claims, to legally settling credit card debt.
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 you settle a credit card debt without being late in your payments?
Credit card companies will only settle with those consumers who have missed monthly payments. If the banks negotiated debts with current account holders, most consumers would want to settle for less than the full amount.
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.
How much of a balance reduction do credit card companies usually settle for?
Online consumer forums have stories of consumers settling for as little as 20 and as much as 70 percent of their credit card account's original balance. According to credit card debt settlement expert Charles Phelan, consumers who settle on their own get the best settlements. Phelan also says credit card companies would rather deal directly with a consumer, rather than go through a debt settlement firm.
According to the Credit Card Debt Survival Guide, banks are most likely to settle for the lowest amount right before they write the account off as a loss. Six months after payments on an account stopped is generally when that happens. At this time it is common for a bank to approach the consumer with a settlement offer. Before this period, when a consumer in arrears approaches the bank with a settlement offer, the bank wants to see evidence of need such as low income, job loss, family death, illness, etc.
About the Author:
Matt Highlander is a consumer who has researched credit counseling, debt settlement, debt collectors and collection attorneys. If you are seeking credit card debt relief, read his Credit Card Debt Survival Guide
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