Do I have a legal right to settle my credit card debt?
While credit card debt settlement firms may assert otherwise, settling a credit card debt does not involve a legal secret.
Credit cards are contracts between consumers and credit card companies. These contracts can be legally modified if both sides mutually agree to the changes. According to the Credit Card Debt Survival Guide, for the consumer the most important LEGAL feature of a credit card debt settlement is getting the negotiated debt amount and the terms in writing and signed.
Can you settle a credit card debt without being late in your payments?
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.
As far as credit card accounts go, consumers fall in to two categories; those who can pay the monthly minimum, and those who cannot. For those who can pay and who want to settle for less than their full balance, they must risk not making their monthly payments and then banking that money for a lump sum settlement.
What percentage of the balance would a credit card company settle for?
On Web discussion boards, consumers report negotiating credit card balance reductions of 20 to 70 percent. Debt settlement teacher Charles Phelan reports credit card companies would rather negotiate with the account holder and not a debt settlement firm, and that consumers get the best deal of they do the negotiating themselves.
According to the Credit Card Debt Survival Guide, banks are most likely to settle for the lowest amount right before they write the account off as a loss. Six months after payments on an account stopped is generally when that happens. At this time it is common for a bank to approach the consumer with a settlement offer. Before this period, when a consumer in arrears approaches the bank with a settlement offer, the bank wants to see evidence of need such as low income, job loss, family death, illness, etc.
Author Resource:-
Matt Highlander researched and wrote the Credit Card Debt Survival Guide. Learn about debt settlement and legal nonpayment strategies for eliminating credit card debt.
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