Settling Credit Card Debt:

Credit card companies will generally want all of their money back. Part of the agreement when you use your card is that you need to pay back the charges that you made on top of the fees and interest you accrue.

There are some cases, however, when credit card issuers come to realize that it is simply not realistic to get the entire amount you owe. They also realize that it is not worth their expense and time to chase you through a lawyer or collections agency just to recoup their funds.

Credit card debts are unsecured, which means that your creditors won’t be able to take your car or house or garnish your wages with no legal intervention. Creditors also know that once your bankruptcy is filed, they will never be able to see even a single dollar of repayment.

If you are going through a significant financial struggle, you might not be able to make the necessary payments to set yourself free from unending debt.

Once they face the possibility that they won’t get back any of the money from you, the credit card company might be willing enough to negotiate with for something lower than the full amount.

But, settling credit card debts for less than the amount you owe is not a strong financial option all the time.

Credit Card Debt Settlement – What is It?

Negotiation is exactly where the process of debt settlement will come in handy. Debt settlement, in the most basic sense, is an agreement you will be making with your creditor. The creditor will agree to receive less than your owed amount for the debt to be satisfied. The amounts of debt settlement typically fall within the range of 50% to 80% of the total balance.

Is Debt Settlement Real?

While debt settlement can be considered as a legit financial process, it still comes with some possible pitfalls.

Learning your rights as a consumer is one of the first steps you can take. For example, there are a lot of people who don’t even know that they can directly reach out to credit card companies to negotiate their own settlement or get the help of an attorney to negotiate things on their behalf. You have to make sure that you are covered through getting written settlement offers before you send money.

There are also people who turn to debt settlement companies that will negotiate with your credit card issuer on your behalf and act as an intermediary. Rather than directly dealing with your credit card issuer, you will be paying the debt settlement agency the amount that has been agreed upon every month. The company will disburse payment to your creditor after a settlement agreement has been reached.

However, not all companies are in your best interests. This is why you should watch out for businesses that are less than reputable that might only be preying on consumers or feeding you wrong information.

Always do your research first to ensure that you will have a seamless process when settling credit card debt.