Debt Settlement Advice – The Way to Use The Threat Of Bankruptcy To Get Rid of Credit Card Debt

In credit card debt settlement method, the debtor works with his creditors in order to settle the debt for a lump sum amount of money and to wipe off the remaining balance due on that account. Usually, a person owing ten thousand dollars to his creditors might be able to settle his account for four thousand dollars down payment. Hence, this is an excellent method to get out of debt an avoid bankruptcy at the same time.

The first step towards settling your credit card debt is to collect information like what is the exact amount that you owe to your creditors, the period for which your account has been delinquent etc. You can check your total debt amount in your latest credit report which you can get from the credit bureaus like Experian, Equifax and Trans Union.

You can call your creditors and tell them that you would like to settle your debts as you cannot pay off the entire debt amount. The creditor will go through your account details and offer you a settlement amount which you can counter offer. But do not lose your cool in the process and do not get into an argument. Such things work against you when you are trying to get a settlement.

Generally it is possible to get a settlement in the range of 40 % to 60 % of the total amount. Hence keep negotiating till you can get your creditors in that range. Use the threat of bankruptcy during the negotiation. Creditors who give out unsecured loan stand to lose the entire loan amount if the debtor files for bankruptcy.

Once you have been offered a favorable settlement, specify clearly whether you will be paying lump sum or through monthly installments. Once the deal is settled get a confirmation letter.