Credit Card Debt Settlement Program Tips

How to get a creditor to make the deal you want.

1. Make sure to have all conditions written down before you even think about writing that check. Do not expect a creditor to fulfil an agreement you made only verbally. All details must be written down to make the creditor observe it until the end of the bargain.

2. Keep your records well, as this can make the difference between a good and bad settlement. Don't expect them to remember you or your previous agreements.

Make sure to have all correspondence via certified mail.

Keep a copy of each of your letters.

Send your letters together with a self-addressed, stamped envelope to make it easier for them to contact you.

If you speak with them on the phone, keep a record of when and whom you talked to. In addition, remember to find out the name of the supervisor of the person you talked to, since the turnover rate at these agencies is rather high.

Don’t forget to follow up all phone conversations with a certified letter.

3. When you make your plan to reduce your debt, start with the added interest and penalties that have accrued.

It may happen that you simply don’t have enough money to pay off a debt in full when a creditor requires you to do so.

Very often a big proportion of the debt is made up of interest and penalties that added up while you were unable to pay.

It is in the interest of both parties to reach a reasonable settlement agreement. The majority of credit card companies would be happy to have you pay the original(without interest and penalties added) debt.

But even this may not be enough to help you pay off the debts; so consider a debt settlement loan. If you qualify, you can get all the unsecured debt paid off for a lot less than you owe and make one monthly payment on the debt settlement loan.

4. Time is an advantage you have in your hands.

As time goes by, the creditors will probably give up, filing your debt away for future attention. The more time that passes with the debt remaining uncollected, the greater the likelihood of negotiating a good settlement.

Finally, the creditor will determine the unpaid debt as a loss to obtain a bad debt tax write-off.

Keep in mind that this doesn't mean they cannot chase you for the debt. In fact, the creditor may pursue collection directly, sell or allocate the debt to a debt collector, turn it over to an attorney for legal action (which could be judgment then garnishment of your wages), or take no notice of the debt.

What the creditor decides to do varies significantly among different companies and types of debt.

A collection agency collecting on your debt now will receive a generous portion of the collected amount (typically 50%-60% on collected amount). If the agency hasn't contacted you directly, they may be willing to take less than 50% to settle the debt.

5. Don’t be too impatient to settle. Take time to reach the most favorable arrangement.

Don't say yes to the first, or even second, agreement being offered. If the creditor thinks he has control of the situation, you will never be able to reach a reasonable settlement.

6. Inform the creditor about the approaching statute of limitations.

This means that they only have a limited time to reach an agreement with you. For this, you need to find out when the statute is up on each debt and be be ready to present the creditor the date of expiration.

7. Tell creditors that you are on the verge of bankruptcy.

This will make them think that you have very little money and it is their very last chance to negotiate with you.

But be careful because if you get involved in any other debt after stating this to a creditor, (and they keep track of all your statements!), you may not be able to charge off this debt in bankruptcy.

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