When you are facing a mountain of credit card debt, the only way of not having to file for bankruptcy seems to be debt settlement. However, you should be aware that debt settlement is not the right solution for everyone. Some facts that you can use to decide whether you will benefit or not:
Debt Settlement Companies Work for Profit
Agencies handling debt settlement are commercial outfits that need to generate profits from people they are trying to help. While it does not mean that they are less than honest, the fees you pay can be quite substantial in the long run. You should also keep in mind that during the process of negotiation if the card company hands over your account to debt collectors, any fees that you have paid to the debt settlement agency are lost. Often these companies take their fees from the money you are depositing for settling the debt, so the actual funds available will invariably be less than what you could have saved by yourself.
Card Companies Are Not Enthused by Debt Settlement Offers
Because card companies tend to lose a lot of money by settling, they will usually try their best not to entertain sob stories by clients or their representatives. Card issuers are not compelled to negotiate and settle the debt for less. It is really how you present your case that seals the deal. However, the negotiations can be extremely frustrating and take a long time during which you hold all payments in a bid to exert more pressure on the card company.
You Need to Have Cash to Settle Debt
The only reason why card companies negotiate and settle debts for substantially less than what is owed to them is that they will receive a lump sum payment from a debtor who would have otherwise paid nothing. The card companies are also relieved of lawsuit expenses or having to sell the debt off at a huge discount to collection agencies. Unless you can promise a lump sum payment to the company, they will not consider settling the debt. Read up on debt settlement reviews for typical success rates.
Building Your Case Is Crucial
For credit card companies to even consider the settlement of dues, they will need to be convinced that indeed it is not possible for you to pay in full due. You should be able to prove that your financial hardship is due to credible reasons like loss of employment, death in the family, divorce, medical emergencies, etc. Demonstrating your inability to pay your dues requires a lot of preparation based on intimate knowledge of the practices and policies in force at the card company. This is the principal reason why people prefer to hire professional debt settlement companies to represent them.
Submitting your case for debt settlement must be on real and credible grounds. You will also need to prove that it is impossible for you to pay your dues in full but you are willing to meet them halfway with a cash payment. Expert negotiation skills and application of pressure tactics are necessary.