Credit Card Debt Settlement: Fact or Fiction?

If you are being harassed by credit card companies or worse, debt collectors, it may feel like your whole life has been turned upside down. You would love to get your debts under control, but you just don’t know how. When you don’t have a plan to achieve that goal, controlling your debts, it’s like setting sail without a rudder. You could end up going around in circles and never solve your credit card debt problems.

Have you considered debt settlement?

Many families have found that the best way to eliminate credit card debt is through a strategy called debt settlement. This is not easy, but it is the only way to file for bankruptcy that can actually eliminate credit card debt. Yes, there are ways that you can consolidate your debt through a debt consolidation loan or consumer credit counseling, but none of them can reduce your debt. All they can do is make it easy for you to pay what you owe.

50 cents on the dollar

In comparison, with debt settlement, you can reduce your debts by as much as 50% or maybe even more. But spoiler alert: you have to be a good negotiator and you have to be pretty tough to pull it off.

Is that how it works

First, you will have to stop making all your credit card payments for at least six months. This means even the minimum monthly payments. It won’t be long before you start hearing from your credit card providers. But you should ignore any letters or phone calls you receive. You will have to save the money that you would have paid on your credit cards, as you will need it to eventually pay off your debts (more on that later).

After six months

You may even start receiving calls from debt collectors before the end of the six months. Again, you have to stand your ground and not make payments, no matter how much pressure the debt collector exerts.

Now you need to add up all of your credit card debt and cut the amount in half. Next, you will need to determine how much you have saved, the cash flow from your monthly income, and any other resources you can use to pay off your debts. The goal is to have enough to pay 50% of your combined debt.

Contact your credit card companies

After at least six months have passed, you can start contacting your credit card companies and making settlement offers. This is where you’ll have to be tough-minded and the nerves of a cat thief. As you can imagine, credit card companies won’t be eager to settle for fifty cents on the dollar. You must be able to convince them to liquidate or go bankrupt. This means that you must have your “arguments” ready so that you can sell this successfully.

Transfer money or send a cashier’s check

If the credit card company agrees to settle, you should have the money available to transfer or send as a cashier’s check immediately. This is why it is important, as noted above, to make sure you have enough cash on hand to pay 50% of your debts.

A fact and not a fiction

In short, debt settlement is fact and not fiction. It will take a fair amount of gut strength to do this, but it can be done. And as many experts will tell you, it is the best way to reduce debt and not simply pass it on from one group of lenders to another.