How to Negotiate a Credit Settlement with Credit Card

| February 5, 2013
Credit Settlement with Credit Card

Credit Settlement with Credit Card

Credit card debts are the most dangerous debts in the market. If you are dreaming of investing or building wealth by buying assets, then you will need to first concentrate on diminishing your credit card debt. Sometimes the situation may take a turn for the worse. If you have become disconcerted by your credit card debt, then for your own good, you must seek credit settlement.

Negotiation with credit settlement with the credit card:

Credit settlement is widely known as the term “debt settlement” in the money lending market. If you are going for this option, then you will need to perform the following step-by-step tasks:

Credit card company affiliated with the bank:

Most frequently credit card companies are affiliated with, and owned by, banks. Still, they do have their own priorities to generate profit. When it is found that a person is not able to pay back the debt balance of the card, the credit card company takes steps to solve the matter. The company, accompanied with the bank, gets back the balance from you at the maximum amount possible. This is done for the debtor’s own good. If the existing amount is being snatched by the company for a while, then the debtor can at least be saved by the charge associated with the income statement. And then the company throws a reduced amount of repayment plan to the debtor so that he/she can save himself/herself from filing bankruptcy.

If the debtor is declared as bankrupt:

Now a major question can be asked in this matter: what can be done when the debtor files bankruptcy? Well, when the debtor declares bankruptcy, the total balance is wiped out because the credit card debts are considered to be unsecured. So, you can be in a safe zone as the debt is not a collateralized debt; if it had been, then you would have lost your assets. What is affected, though, is your credit score which can have a drastic reduction if you miss several payments. In fact, in the bankruptcy credit settlement, you will be given a debt plan, and you will have to pay back the debt accordingly. The missed payments will cause you to risk your credit rating.

Carrying costs for the credit card debt settlement:

If you are in the process of going through a credit card debt settlement, then you will need to be prepared to carry substantial costs. The costs are mostly derived from your bad credit record. As the debt turns into a form of unsecured loan, the rate and fees increase. We know that no credit check unsecured debts are too expensive, so credit card debts can become too expensive for debtors. Moreover, some people leave, using their credit card to avoid such matters.

About the author:

Fedrick Williams is a professional writer who writes articles on financial issues. He currently contributes informative articles for Steven Boccone – an economist and financial management consultant.

 

How to Negotiate a Credit Settlement with Credit Card

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