If you're deep in the hole financially and don't want to file for bankruptcy, it may be time to negotiate credit card debt.
In a tight economy, your creditors may be more open to this approach than ever before, and you'll be able to use the help of a reputable debt settlement company.
Negotiating debt, also known as debt settlement, is a process of reaching a compromise with your credit card companies in which you'll pay them a portion of your balance in one lump sum -- usually between 40 and 60 percent of what you owe.
It's possible to settle your debt on your own or by hiring a debt settlement company, but going it alone isn't recommended.
For one thing, trying to negotiate any debt solo puts you at a bargaining disadvantage, since you're a much smaller player than the creditors with which you're trying to negotiate.
For another, you're not equipped to manage the bureaucracy and red tape most creditors put in your way.
Plus, there are a fair number of creditors who aren't willing to negotiate directly with consumers.
On the other hand, a debt settlement company does regular business with credit card companies.
This means it can bargain in bulk, and can reach much more favorable settlement agreements, and much faster, than a consumer acting alone.
A settlement company is also a buffer between you and your creditors, handling communications from your creditors, including collection calls.
And it gives you a louder voice in your negotiations than you could ever have on your own, as well as an expert guide to lead you through a confusing process.
Consumers who decide it's time to negotiate debt usually have a limited number of options.
They could also file for Chapter 7 bankruptcy, though that would mean severely damaged credit and long-term financial restrictions, or they could try to set up payment plans, though these only cut monthly interest payments, not underlying debts.
With the economy stalled and jobs hard to find, more and more people have decided to negotiate credit card debt.
The time to do it has never been better.
Consumers are suffering, but creditors are suffering, too, and they'd rather get back some of their money through negotiation than get back none of it in bankruptcy court, so they're often willing to accept substantially less than the face value of consumers' debts.
You should know how the debt settlement process works before you get started.
As soon as you hire a debt settlement company, you'll be instructed to halt all monthly payments to your credit card companies.
Instead, the money will go into a trust account set up by the settlement company.
This serves a couple purposes: It creates a pool of money that can be used to pay back creditors in lump sums once settlements are reached, and it creates leverage than can be used to convince them to come to the table.
As a rule, they aren't willing to negotiate credit card debt while you're making payments on it.
You should always be aware of the risks involved in any major financial decision, including a decision to negotiate credit card debt.
But the settlement industry is regulated by the Federal Trade Commission, so there are protections against fraud and abuse should you decide you want to negotiate using a settlement company.
If you find yourself swimming in credit card bills, you may be asking yourself what choices you have.
If you want to get out of what you owe without filing for bankruptcy, a choice you should definitely consider is trying to negotiate credit card debt.
In a tight economy, your creditors may be more open to this approach than ever before, and you'll be able to use the help of a reputable debt settlement company.
Negotiating debt, also known as debt settlement, is a process of reaching a compromise with your credit card companies in which you'll pay them a portion of your balance in one lump sum -- usually between 40 and 60 percent of what you owe.
It's possible to settle your debt on your own or by hiring a debt settlement company, but going it alone isn't recommended.
For one thing, trying to negotiate any debt solo puts you at a bargaining disadvantage, since you're a much smaller player than the creditors with which you're trying to negotiate.
For another, you're not equipped to manage the bureaucracy and red tape most creditors put in your way.
Plus, there are a fair number of creditors who aren't willing to negotiate directly with consumers.
On the other hand, a debt settlement company does regular business with credit card companies.
This means it can bargain in bulk, and can reach much more favorable settlement agreements, and much faster, than a consumer acting alone.
A settlement company is also a buffer between you and your creditors, handling communications from your creditors, including collection calls.
And it gives you a louder voice in your negotiations than you could ever have on your own, as well as an expert guide to lead you through a confusing process.
Consumers who decide it's time to negotiate debt usually have a limited number of options.
They could also file for Chapter 7 bankruptcy, though that would mean severely damaged credit and long-term financial restrictions, or they could try to set up payment plans, though these only cut monthly interest payments, not underlying debts.
With the economy stalled and jobs hard to find, more and more people have decided to negotiate credit card debt.
The time to do it has never been better.
Consumers are suffering, but creditors are suffering, too, and they'd rather get back some of their money through negotiation than get back none of it in bankruptcy court, so they're often willing to accept substantially less than the face value of consumers' debts.
You should know how the debt settlement process works before you get started.
As soon as you hire a debt settlement company, you'll be instructed to halt all monthly payments to your credit card companies.
Instead, the money will go into a trust account set up by the settlement company.
This serves a couple purposes: It creates a pool of money that can be used to pay back creditors in lump sums once settlements are reached, and it creates leverage than can be used to convince them to come to the table.
As a rule, they aren't willing to negotiate credit card debt while you're making payments on it.
You should always be aware of the risks involved in any major financial decision, including a decision to negotiate credit card debt.
But the settlement industry is regulated by the Federal Trade Commission, so there are protections against fraud and abuse should you decide you want to negotiate using a settlement company.
If you find yourself swimming in credit card bills, you may be asking yourself what choices you have.
If you want to get out of what you owe without filing for bankruptcy, a choice you should definitely consider is trying to negotiate credit card debt.
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