How to negotiate with credit card companies to settle debt
You have done it all to pay off your debt and you are still drowning financially, beside bankruptcy there is still an option. Informing your creditors about your situation and telling them that you have no other option left beside bankruptcy but you want to avoid at all costs. You can ask for a revised payment plan, lower interest rate. You will have to appeal to their desire of getting paid, as faced with the prospect of total loss in case of you declaring bankruptcy they will try to avoid it as much as you do.
This sounds like solid good news but it is not a bed of roses, it is painstaking hard work. You will have to make long frequent calls to the bank for them to understand your position. You will need to be consistent and determined with your efforts if you want your bank to make a settlement. Negotiations isn’t easy, but if ...view middle of the document...
ii) Workout arrangement: The bank in this plan lowers the interest rate or wave off the penalties on late fees etc. This can be temporary to help you get back on your feet or could be permanent till you pay off the entire amount.
iii) Forbearance program: It gives you some relief time to get your affairs back in order and then you can pay off the total amount.
iv) Debt management program: If you are unable to negotiate with the bank yourself you can opt to go to a debt management program that will take care of your matters with company and help with your credit cards.
2. Now you need to examine your debt, how much you money you owe originally, how much is interest and how much is because of late fees and penalties. Now decide how much you can pay off, make a budget and set an amount that you can afford. You might be able to pay some of the debt and get a settlement on the rest.
3. Now this is the hardest step and requires perseverance and determination. “Call the bank”, and call frequently until you get yourself heard. Every bank has a different set up, usually the first person you talk to doesn’t even have enough authority to give you what you want, so ask for someone higher up. Keep on calling until you talk to a relevant person.
4. You should be clear and sum up the situation you are in exactly, tell them honestly that you are unable to pay them off but you still want to honor you commitment. Ask them for a plan that would help you both out. Keep on negotiating until you get something near what you wanted, do mention bankruptcy incase of no settlement.
5. Finally when you get a settlement plan, put everything in a written agreement. Situation is changing everyday in today’s market, the person you talked to might change or the bank merge with some other bank. The point is you need a proof from the bank in case of any problem so better be careful than sorry.
When you are going for a settlement from a bank, it is the presumable the last resort and is in no way easy. These steps on How to negotiate with credit card companies to settle debt will be a little help in your hard times.