How to Negotiate Debts with a Credit Card Company

Debt relief is of paramount importance if you cannot handle your bills when they come. If you find yourself dreading going to the mail box and spending your day dealing with phone calls from collectors who are ever-more agitated, then you need to look into your debt relief options. For many people, one of the best debt relief options- and a far superior alternative to bankruptcy- involves negotiating or settling debts with creditors. If you feel this option is right for you, you will need to understand the process of exactly how to settle debt with creditors to get debt relief.

Understanding Debt Negotiation

Debt negotiation simply involves getting your creditor to agree to lower the balance due on your card if you will pay. Most commonly, this involves promising the creditor to send a single one-time lump sum payment in exchange for the creditor forgiving any remaining balance on the card. For example, if you owed $1000, you could tell the creditor you'd send $500 if he'd forgive the rest. Sometimes, the settlement offer can be in the form of a payment plan, but creditors are more likely to agree if they know they will get the cash.

It seems like a bad deal for creditors, but in reality, many creditors can get more through debt settlement than they would in bankruptcy or if they charged off the bad debt (sold it to another company after giving up on you). Because it is financially advantageous in many ways, creditors will agree in most cases- if you follow the right steps for negotiating. This involves:

• Stopping payments. Creditors aren't going to negotiate if you are paying on time, since they have no incentive. They need to be a bit frightened that they will get nothing before they are ripe for negotiation. Be warned, however, that not paying your debts can wreck havoc on your credit score
• Making an offer.  Once you are late, you can make a one time lump sum settlement offer. If possible, try to make the offer in writing. However, if you do make an oral contract with a collection agency, don't do anything or send any money until you have the full terms of the deal in writing
• Paying on the offer. Usually, this is a one-time payment you agreed on

Getting Help

Negotiating debt settlement doesn't have to be hard and can be a great method of debt relief. Your best bet is to talk to a lawyer who specializes in debt settlement and who will be able to help you understand your options and negotiate a great deal with your creditor.