Do I have a legal right to settle my credit card debt?
While credit card debt settlement firms may assert otherwise, settling a credit card debt does not involve a legal secret.
Unsigned, credit card agreements are contracts between the credit card bank and the applying consumer. Like any contract, these contracts can be lawfully edited with the agreement of both sides. The most vital legal aspect of negotiating credit card debt for the consumer, according to the Credit Card Debt Survival Guide, is getting the settlement and its terms in writing.
Can I settle my credit card debt while still making 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.
To settle a credit card debt for less than full value with the bank, a consumer will have to risk not making monthly credit card payments, then save those payments for a lump sum settlement. The risk comes from being in arrears and having the bank not agree to the lump sum amount.
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, hurt 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.