Do it Yourself Debt Settlement – A Viable Alternative?
In business everything is negotiable, even something as apparently clearly defined as credit card debt. It is only a question of knowing what to say. If you have a debt that you cannot pay off, usually from revolving credit, a viable alternative is to use a strategy called debt settlement, something you can even do yourself without hiring a debt settlement company to negotiate for you.
What Is Debt Settlement?
Although it may seem illogical that a credit card company would be willing to forego from 40 percent to 60 percent of the money you owe them, it is indeed possible to negotiate for this to happen. Since your charge card bill is based on unsecured credit, if you default on your payment entirely, the company will get nothing. This is why, when they feel that you may not pay off anything, they are willing to settle so that they can receive something. Obviously this is not something that they want you to know, but now that you do, it is possible to talk to them to reduce your amount significantly.
How Do You Do It Yourself?
You start the process by calling the customer service department of your charge card company, asking to speak to a representative in the settlement department. Now explain to this person how bad your financial situation is and how you only have a little amount to pay off one of your charge card accounts. This creates a competitive edge. Begin the negotiations by saying that you will offer a dollar figure that is about 40% of your bill. Your offer is usually met with a counteroffer. If they are not willing to compromise at all, then firmly state that you will have to give the money to another open-end credit account. At this point, they may or may not be willing to accept your offer.
If they refuse to work with you, you have one last option before you hang up–you can ask them if they are at least willing to lower your interest rate or suspend it for a specified period of time while you try to work off your debt. Sometimes you can make this happen, because by now the representative feels that this is a small compromise to make.
Does debt settlement work? Is it a viable option? It has worked many times for many people and the deciding factor is negotiation skills.
By: Hector Milla
Tags: Card Accounts, Charge Card, Competitive Edge, Counteroffer, Credit Card Company, Credit Card Debt, Credit Debt, Customer Service Department, Debt Settlement, Dollar Figure, Financial Situation, Interest Rate, Last Option, Met, Money, Negotiations, Period Of Time, Revolving Credit, Settlement Company, Unsecured Credit