How To Negotiate Down Credit Card Debt

Here's a scenario you may be familiar with – you and your spouse have a dream of starting a new business and you invest your life savings into it and it does not work out as planned and now you are saddled with a large amount of credit card debt because you were using the credit cards to stay afloat and meet payroll.  Or, you decided to start your business during a financial crisis where money was tight and no one was willing to lend money at an affordable rate.  Now you have all this debt and you need some relief and you are thinking more and more that bankruptcy may be your only option.  Find out about how debt negotation may be a better option for you and keep your credit rating intact unlike with a bankruptcy filing.

Debt negotiation is just what it sounds like, you negotiate with your creditors and try to get a situation you both can live with.  They still want to get paid some of what you owe them and you can only afford to give them so much because you still have to pay other essential bills like the light and water bills. 

So how to negotiate debt? You show them your assets and liabilities and show them that you could offer them a lump sum payment in exchange for them wiping out your total balance.  Let's say you owed $20,000, you could offer a $8,000-$10,000 settlement right now, money that you have saved up, in exchange for them eliminating your balance and reporting your account as paid on your credit report.  The alternative for them is that you file bankruptcy and have no shot at that 8-10 grand you are offering right now. 

Your results will vary with debt negotiation, but on average, you can save anywhere from 40-60% of what you owe, sometimes you can save more and sometimes you will save less.  It all depends on your credit card companies' willingness to make a deal with you.  But when they are struggling with mounting debt problems of their own, your settlement offer may just be what they need to keep your account profitable. 

Be Sociable, Share!

•