Understanding how to negotiate credit card debt can reduce the total amount of money owed to creditors by up to 60%. In addition, it can help you to get threatening debt collectors off your back and it can reduce the amount of finance-related stress in your life. Lenders generally prefer negotiating settlements with individuals over selling past-due accounts to collection agencies that pay just pennies on the dollar. However, if you are not fully educated on your consumer rights and the nuances of negotiation, your creditors may not take you seriously enough to reduce your total amount owed by meaningful measures.
Use a specialized Service
On way to ensure that you are taken seriously in credit card debt negotiations is to hire a specialized service to represent you. Either a debt lawyer or a representative from a respected debt relief organization with likely have more negotiating clout when dealing with your creditors. A specialized credit card debt negotiation service can provide:
• Knowledge of consumer debt collection laws
• Established business relationships with lenders/collectors
• Good faith association with a reputable relief agency
All of these advantages will help you to negotiate the lowest possible credit card debt settlements with your various lenders. While specialized negotiation sets are not free, they can help you to save money in the end by eliminating up to 60% of your total monies owed to creditors.
Consider a Consolidation Loan
Most creditors will only negotiate reduced settlements with individuals that can pay off their accounts via a single lump sum or a small number of payments. A consolidation loan is consequently a terrific method of gaining advantage in negotiations with your creditors.
A consolidation loan is essentially one large loan that is used to pay off all your creditors in one fell swoop. The amount borrowed is then repaid to your consolidation lender via a single monthly payment that is custom tailored to your current budget. The advantages of a consolidation loan are:
• Streamlined monthly payments
• Ability to pay off credit card accounts via lump sum payments
• An end to all late payments to various creditors
Consolidation can provide a very real method of settling your negative debt problems for the last time, helping you to gain control over your spiraling finances and repay what you owe in a manner you can reasonably provide.
Enroll in a Debt Relief Program
If you are interested in a comprehensive aid in your attempts to negotiate credit card debt, you might want to consider enrolling in a debt relief program. Once joined, you will enjoy the help of specialized negotiators and will have an inside track to securing a consolidation loan.
In addition to helping you get out of crushing credit card debt, debt relief programs help to cure the systemic financial problems that first got you into trouble. Debt relief programs typically offer fiscal education materials on:
Debt relief organizations can help you to create a realistic budget that helps you live within your method, consequently avoiding bad spending habits that incur credit card debt over time.
Do Your Homework
While enrolling in a reputable debt relief program or employing the sets or a trusted debt lawyer can help you to negotiate credit card debt, fraudulent programs also exist. Avoid specialized debt negotiators that potential the world but fail to deliver on their promises.
One of the best ways to separate the good guys from the bad guys is to utilize the free sets of watchdog organizations such as the Better Business Bureau (BBB). The BBB has served consumers for almost 100 years, providing objective information on various companies’ business practices. The BBB will proportion both positive and negative feedback they have received on any given company, allowing you to get a balanced picture of the service you can expect to receive. The BBB provides consumers with:
• A letter grade for each company (A being the best; F being the worst)
• Information on unresolved conflicts with consumers
• A stamp of accreditation for businesses that meet BBB service standards
You would be wise to check with the BBB before signing on the dotted line with any specialized credit card debt negotiation service. It may save you a great deal of time, money and stress in the end.
If you are in over your head when it comes to debt, you would be wise to come clean on your situation to your creditors or specialized debt-relief organization. While you may be tempted to agree to a settlement with your creditor that eliminates a large portion of what you owe in exchange for a lump sum or small group of consecutive payments, your settlement agreement becomes null and void if you miss a single payment. Though the truth may not land you the stellar settlement you are after, it can help you to avoid repayment complications that may cost you money in late fees and damage your credit report.
While it is important to be realistic when negotiating with creditors, it is also imperative that you be as aggressive as possible with your repayment plan. If you have money saved for a rainy day, use it to make your lump sum payment to close your credit account in good standing. If you are employing a consolidation loan, make it as short-term as possible in order to avoid paying monthly interest rates over an extended period.