Credit card debt settlement is an option that you may be able to take if you have long outstanding credit card debts where you are not making the monthly payments. To learn more about reducing credit card debt visit http://www.reducedebtstobedebtfree.com

1. Credit Card Debt Settlement: Your Options
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2. Credit card debt settlement is an option that
you may be able to take if you have long
outstanding credit card debts where you are
not making the monthly payments.

3. What Is Discounted Debt Settlement?
Sometimes, if a company can see from its records
that you have not paid anything for a while and they
figure it is not likely that they will get the full
amount of the debt plus interest from you, they will
sent you a discounted debt settlement offer.

4. This means that they will write with an offer
where you can pay perhaps 50% of the debt and
they will write off the rest.
Usually they will want this all in one payment, but
if it is a large amount they may accept it in two or
three installments.

5. Often the letter will come from a debt collection
agency. This can mean that your original lender
has signed over the debt to the debt collectors, or
it may simply mean that the agency is working for
a percentage of whatever they can recover.

6. Why Do They Offer Debt Settlement?
The finance companies offer this when they can
see that you are having so much trouble making
payments, they might have to take you to court to
get the whole amount, and maybe they wouldn't
even get it then, because you might declare
bankruptcy.

7. So they have a choice between incurring the cost
of court proceedings and perhaps still getting
nothing from you, or offering you this deal where
you pay 50% or whatever.
They figure they will be better off accepting half of
what you owe, than trying to get the full amount
through the courts.

8. What Should You Do?
Whether you should accept the offer depends on
many factors.

9. First
you should be aware that accepting this will affect
your credit score in a negative way, because you
will not have paid off your whole debt.
If you can pay the full amount then it is better for
your credit record if you do so.
However, you probably would not have gotten to
the point of receiving a settlement offer if you
could pay in full. Accepting the settlement offer is
usually better than having court actions against
you.

10. Second
You will need to consider how you can make the
payment that they want. Does it mean that other
debts will go unpaid for a couple of months?
What will be the consequences of that? Would
you have to miss rent payments and perhaps lose
your home? Think carefully about how you can
raise the money.

11. Third
Even if you decide to accept it may be worth
trying to negotiate a lower settlement.
This means calling them and saying that you
cannot pay what they have asked for but you
could pay 40% or whatever.
This is often worth trying because it can save you
some money without extra penalties.

12. When you call, write down the person's name that
you speak to. If they accept your offer, ask them to
put it in writing and wait for the letter to come
before you pay.
Then write a letter to send with your check stating
that this is full and final settlement of your debt,
and ask them to write back acknowledging that
the debt has been paid.

13. Be aware that if you decide not to accept the offer,
then after a while they may take the matter to
court.
A court may judge that you must pay the whole
amount plus the costs, so you would have a lot
more to pay.

14. If you decide to accept, always read the small print
on any offer. You need to be sure this is full
settlement and they will write off any additional
debt, so they have no right to come back to you in
future demanding more.

15. When everything is complete, check out what has
been posted to your credit record.
If there is any mistake you should ask for it to be
corrected right away and you will need to send
copies of all of your correspondence.
So keep all of the paperwork when you accept any
credit card debt settlement.

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