The Importance of Settling Credit Card Debt
If after all your hard work to keep your bills current isn’t making you any headway on your credit card debts, you’re not alone. Once credit card debts reach a certain point, it can be next to impossible to pay enough each month to make a real impact on your card balances.
Maybe you’ve recently received some bad financial news like the loss of a job or an unexpected medical bill, bringing an already stressful financial situation to a boiling point. Thankfully, Alleviate Financial Solutions has helped countless folks in situations just like yours to achieve financial stability and freedom.
If you’re just starting to research how to solve your credit card debt problem, read on to learn about debt settlement on your own and with assistance so you can decide which approach is best for your scenario.
Should You Consider Negotiating First?
The thought of negotiating with a large credit card company you’re indebted to may sound like a scary proposition. You’re probably already embarrassed enough about not being able to pay all of your bills and would rather avoid being humiliated by an angry person over the phone.
Although you’re legally allowed to negotiate with your debtors on your own, it isn’t always the best idea. Who, then, actually negotiates with creditors if it isn’t the debtor? Often, this is a debt settlement attorney or a debt settlement company. They represent the person who owes the debt and negotiates on his or her behalf to reduce the debt as much as possible.
If you’re unsure about whether or not you need an attorney to help you if a lawsuit has been filed for your credit card debt, read our article: How to settle credit card debt when a lawsuit has been filed.
What Are The Pros of DIY Credit Card Debt Settlement?
Avoid bankruptcy
Settling your debts is often a smarter option than filing bankruptcy, but it depends on what your overall financial situation is. With that said, everyone’s financial circumstances are different, so discussing your plans with a debt relief expert can help you be sure that debt settlement is the right solution for your financial circumstances.
Choosing bankruptcy is never an easy decision, not just because of the resulting massive hit to your credit, but because you could possibly lose some of your assets as part of the legal dealings between your creditors to repay your debts.
This is a key distinction between bankruptcy and debt settlement programs––with debt settlement, you always get to keep your stuff while getting a more comfortable payment arrangement with your creditors. But with bankruptcy, there’s always the chance you could lose some of your hard-earned assets to satisfy your creditors.
Get a more flexible payment arrangement
Debt settlement enables you to negotiate a specific amount of time to pay down your debt and get back on track. This might be up to five years in some cases, but that’s far better than the ten years of bad credit that comes with bankruptcy.
Tips for Effective Credit Card Debt Negotiation
Wondering if you can settle your credit card debt if you’re still current? What about if you can settle credit card debt that’s past due on your own?
The good news is, you’re well within your rights to call up your lenders directly and attempt to negotiate with them. Simply explain your financial situation, why you’re going through financial hardship, and ask if they would be willing to work with you to resolve the debt.
It’s not uncommon for credit card companies to give customers who’ve fallen behind a one to two month grace period. You also may be able to get an agreement allowing you to make a partial payment or make a payment with no interest.
With that said, if you’re already behind and have late fees and past-due payments to make up, then you might want to consider seeking debt relief or debt settlement services from professionals like Alleviate Financial. Contact us at alleviatefinancial.com to speak with one of our debt settlement experts to learn what the right options are for you.
Assess All Your Debts
When you’re thinking about attempting debt settlement on your own, it’s crucial to assess all your debts, not only your credit card debt. While clearing credit card debt is a good first step to financial freedom, it shouldn’t negatively impact the rest of your accounts that have an effect on your credit.
Research Different Creditors
It’s smart to do some research about your creditors to learn how others have been successful when negotiating their debts. This can arm you with the information you need to negotiate.
Outline Your Ideal Terms
Before you get on the phone with your creditors, it’s best to have a plan worked out so you know your ideal terms for the settlement arrangement. Knowing what your financial limits are is essential to getting the deal that’s in your favor.
Take Thorough Notes and Get an Agreement in Writing
When negotiating a settlement on your credit card debt, it’s crucial to take notes and get everything in writing. Be sure to have the credit card company send the settlement terms in writing so you have legal recourse in case things don’t go as planned.
What’s The Potential Impact on Credit?
Can you settle your credit card debt without hurting your credit? That depends a lot on how you go about it. If you simply consolidate your debt rather than settle, the impact could potentially be good if your old accounts stay open with zero balances. With debt settlement, there’s a good chance your credit will take a dip if you don’t get agreements in writing that the accounts will be marked paid in full on your credit report.
If you are dealing with financial hardship and would like more information about debt settlement, contact us today.
