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SolveYourProblem.com
Article Series: Debt Relief & Debt Consolidation
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Negotiating
Your Credit Card Debts
If you’re in a really bad situation, and you
just can’t even make your minimum payments this month, don’t
worry. You can negotiate your debts, and pay back much less
than you owe – as long as they get their debt plus interest
in the end, no-one is expecting you to pay the full amount
when you just can’t afford to.
Settling
your debts takes a lot of time, and many people find
it intimidating. If you do it right, though, you’ll be surprised
at how kind your creditors (that is, the people you owe money
to) can be.
Close My Account.
It might feel bad, but if you can’t afford to pay that credit
card, you’ll have to close the account – that means you can’t
borrow any more money with that card. To close the account,
you’ll have to negotiate something called a ‘payment plan’.
A payment plan turns your credit card debt into a plain old
loan. The company might take as much as 50% off the amount
that you need to pay back. It might seem strange, but they’re
happy you’re paying at all – there are plenty of people who
just don’t pay and have to be chased, costing their creditors
time and money. They’d rather hear from you if you’re having
trouble, so don’t bury your head in the sand.
It’s in your creditors’ best interest to take whatever you
can offer them, within reason. Their alternatives are lengthy
court proceedings, or paying collection agencies to come round
and intimidate you. They know that your offer will probably
be the only offer you make before you do something more extreme
that could result in them never getting any money back.
Do It in a Letter.
Phoning companies to ask to negotiate your debts isn’t a good
idea – it’s too easy to get flustered and say the wrong thing.
They’re professional negotiators, and you’re not. You need
the advantage of having time to think, which is why you should
always negotiate with them by post. Getting it in writing also
means that you can hold them to what they say later on. Here’s
a sample letter:
“Dear Sir or Madam,
I regret to inform you that I can no longer afford to make
my minimum payments of $100 per month on my credit card account
with you (account number 111-222-333). I would like to request
the closure of my account, followed by the settlement of the
debt on a monthly payment plan. Please advise what kind of
terms I could expect from such a plan.
Yours faithfully…”
The Damage to Your Credit Report.
You will rarely be able to negotiate over your debts without
doing some damage to your credit report. If you’re willing
to pay a bigger percentage of the debt, though, you might be
able to persuade the creditor to say that it was paid off to
their satisfaction, instead of recording that they accepted
less than they wanted. It’s up to you just how much you feel
your credit report is worth – if you’re planning on getting
a big loan anytime soon, this could be something to consider.
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by SolveYourProblem.com
: 2006
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