Seamus McKenzie asked: If you find yourself unable to keep up with your credit card bills, debt negotiation may be your solution. It’s definitely worth a try before you decide to file bankruptcy, although it isn’t always an easy process. If you are able to save a large sum of money, or have a willing family member or friend who can loan you money – you may have the best chance at negotiating credit card debt with the lender. Many times they will take a lump sum amount, less than what you owe, and consider the account as “paid in full”. They will do this if they feel you are at risk for filing bankruptcy because they feel a partial payment is better than no payment at all! For most people considering debt negotiation, however, there is no savings account with money waiting to be used. Here are some tips for negotiating credit card debt:
Call Your Companies to Negotiate
Let the customer service representative know that you are having financial difficulties that will not be fixed any time soon, and you’re having trouble keeping up with your payments. Ask them if they can help you with a different payment arrangement. Sometimes, a credit card company can reduce or eliminate your interest rate, and stop charging late fees and over-the-limit fees. Often, these payment arrangements are made on a temporary basis, for 6 months or 12 months, but sometimes you can qualify for a permanent change that will remain in place until you’ve paid off the entire balance.
If you get a payment arrangement, you can expect that your card will be closed so you can no longer use the card. You may try to get the creditor to remove any previous late fees and over-limit-fees to reduce the amount you owe a little more, as well. Ask the company to report your new payments as paid-as-agreed under the new payment arrangement terms, and you’ll start to improve your credit score.
Ask for Forbearance Program
If you know your current financial situation is so bad that you can’t even keep up with a reduced credit card payment under the proposed negotiation plan – ask for a temporary forbearance. Sometimes, lenders will give you time off from making payments (without charging fees during this time) to help you get back on your feet. For 6 months, you may not have to make any payments to your credit card company – which would be ideal if that gave you enough time to find a new job, pay medical bills, or take care of whatever problem you have that is causing you the inability to pay your bills in the first place.
Keep in mind that all credit card companies have their own policies regarding debt negotiation and do not have to agree to any terms you request. You may have to call the companies more than once to set up a debt negotiation but if you can make it happen, it’s definitely the better choice over bankruptcy for most people.
Gladys
