Is there a legal secret to settling credit card debt?

Contrary to debt settlement firms advertising the SECRET credit card companies do not want you to know, there is no secret to legally settling credit card debt.

A credit card account is a contract between two parties. That contract can be changed if there is agreement between the consumer and the credit card bank. In this context, the most important part of LEGAL is for the consumer to get the negotiated debt reduction and its terms in writing, according to the Credit Card Debt Survival Guide.

Can I settle my credit card debt while my payments are still current?

Credit card companies will only settle with those consumers who have missed monthly payments. If the banks negotiated debts with current account holders, most consumers would want to settle for less than the full amount.

In most cases the reality is only those consumers, who can make their monthly credit card payments, can afford to settle. To negotiate their credit card debt with the bank, they must first take the risk of not making monthly payments to get the bank’s attention. Then they have to save those payments for the lump sum payment they hope the bank will take.

What percentage of the balance will a credit card company settle for?

On Internet consumer forums you can read of individuals negotiating credit card debt down to 20 to 70 percent of the current balance. Credit card banks prefer dealing directly with consumers rather than going through debt settlement companies, according to Charles Phelan, a debt settlement trainer. He also says consumers who negotiate on their own get the best settlements.

For a debt reduction agreement initiated by a consumer to work, credit card debt banks want consumers with real hardship issues like low income, job loss, family death, medical catastrophe, etc. The best time to settle, according to the Credit Card Debt Survival Guide, is right before the bank charges off the account. This usually happens six months after payments stopped. During this period, banks sometimes contact the consumer and offer to reduce the balance.

Matt Highlander researched and wrote the Credit Card Debt Survival Guide for consumers seeking to educate themselves about credit card debt relief.

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