There are situations or points in our financial life where we are not in a condition to pay our debts and in such a condition it might seem almost impossible for you to pay your credit card debt.
You can lessen your worry by negotiating with your creditor and making a debt settlement agreement. Also, it is not always necessary to seek external debt settlement assistance if you have enough knowledge that will help you to.
First of all, know that why do the credit card companies are ready to negotiate:
Most of these credit card companies are owned by the bank and their main aim is earning profit for parent companies. When the company is sure that you will not be able to pay the amount, they try to extract money as much as possible and try to negotiate. Also if they do not do so it can result in a significant loss for company and impact their income statement.
If you are at the level of bankruptcy they would negotiate for definite because something is better than nothing.
What are your available options?
If the debt negotiations are done by the customer themselves then it is important to know settlement options, the company provides. The most common of them are:
1. Lump-sum payment agreement:
In this debt settlement, you will have to pay an amount against all your debt at one go and also for that you should have cash. You can make this debt agreement in case you have a lot of savings, got a bonus at work or have inheritance.
2. Workout agreement:
The company lowers your interest rate, can reduce your monthly payments and totally waiver the late fees. This is done on an agreed plan.
3. Hardship Payment agreement:
If the financial problem has occurred due to job loss, natural disaster or illness than the company can reduce the interest rates; lower your monthly minimum payments.
Documenting everything and be patient:
It is very necessary to be patient as you might have to make a lot of calls in the company to different people. Document each phonic conversation for record and try to convince them that it’s for the bank’s benefit otherwise they might not be able to receive any payment from you in the future.
The downside of agreement:
Because of these debt negotiations, the amount that the companies have wavered is big then you might have to pay a tax on it. Also, the process takes too long and a few months already would have passed without making a payment which can cause extra burden. A Debt Consolidation loan can help here.
At the end
You can also use a credit counselling service for consultation. Credit720’s excellent debt settlement methods are perfect to ease up your burden and provide you the best debt negotiations advice.