Negotiating Debt Settlements For Credit Cards – Debt Settlement Negotiation Tips

You may be aware that negotiating debt settlements is one of the most effective ways to get rid of credit card debt. What you may be less sure about is how to go about doing that successfully. This article will explain how the process works and what your options are when you wish to go ahead with debt settlement.

First of all, I want to be clear about what debt settlement is and is not. Debt settlement should not be confused with debt consolidation or debt management. Whereas these other debt solutions are about finding new ways to repay your entire debt, the settlement approach is about negotiating big reductions in the amount that you owe before paying off the remainder.

Negotiating debt settlements is an option that is often used when a person is in a situation that is too serious for debt consolidation to work. If you do not have enough spare income to make the payments required in a debt management plan, then debt settlement could be the answer. Debt settlement is an approach which is particularly suitable and effective for dealing with credit card debt.

Negotiating debt settlements depends on being able to persuade credit card companies to write off a lot of what you owe, but they are not likely to do this if they think that you can actually afford to pay back the full amount. For this reason it is more appropriate for people in quite serious situations, perhaps considering bankruptcy as the only alternative.

Once you are sure that negotiating debt settlements is the right option for you, there is a fundamental decision to make about how to actually do it. The vast majority of people choose to use the services of an experienced debt settlement company, but it is also possible to opt to do it yourself. To make an informed decision about this you need to have an understanding of what is involved in each option.

Negotiating debt settlements is a very specialist area and not something you are just going to be able to succeed at without some knowledge of the how credit card companies operate and the processes that they go through. The fact that you do not already know anything about any of this does not need to be a barrier to going down this route, as it is possible to get detailed help and guidance to take you through the whole process of negotiating successful settlements. If you are able to do this yourself, the clear advantage is that you take full advantage of the reductions you achieve because there is nothing to pay to a debt settlement company.

The alternative is to use someone who is used to negotiating debt settlements every day, and who understands the process completely.  The main advantages of this are that you can leave it all to them and they understand how each creditor operates and how to time their negotiations to achieve maximum discounts on your debts. With some of the more well established companies, you can get the added advantage of the fact that they are negotiating with the same creditors for many other people too, so are able to get much greater reductions because of the larger amounts of money involved.

The only downside of negotiating debt settlements through a specialist company is that they need to be paid. However, the best companies will only take a proportion of whatever they manage to save you, so you still end up much better off, you just do not save quite as much as if you did it yourself. Debt settlement companies do not operate in the same way in the UK, because there is an alternative scheme called an IVA, which is widely offered by debt management companies, and which also results in debts being written off.

If you are not confident about negotiating debt settlements yourself and you decide to use the services of a debt settlement company, you have an extremely important decision to make with regard to which one you choose to help you. The reason this is so important is that there are quite a lot of debt settlement companies out there who range from being just not very good, to the downright rip-offs. Unless you take some precautions over who you select, you could end up being one of the many people each year who find themselves worse off after debt settlement than before.

To be safe, you need to avoid any new companies or organisations that cannot prove they have a record of success in negotiating debt settlements. A good company will be able to point to lots of satisfied customers. Another good safeguard is to always apply to about three companies, then go with whichever comes up with the best value offer. The easiest approach is to follow recommendations for companies that are known to be very well established and ethical, then choose a few from the list to apply to. Applying puts you under no obligation to take up any offers, and it gives you the opportunity to get a feel for the company and the people working for it.

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