Credit Card Debt Settlement

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Credit Card Debt Settlement - Definition
Credit card debt settlement involves the appointment of a service provider to attempt a credit card debt settlement negotiation with creditors.

Credit Debt Settlement
It is possible to attempt a credit debt settlement negotiation yourself. Here we discuss the process of credit card debt settlement that takes place when you enlist the help of an organization offering the specific service known as Debt Settlement.

credit debt settlement

The option for dealing with debt known as Settlement is a risky one in general, however, credit card debt settlement is riskier still for two main reasons:

- Credit card debt settlement involves accounts subject to the highest rates of interest and penalty regimes.
- There may be multiple creditors involved so increasing the risk of failure where an agreement needs to be reached   with each separate creditor.

With credit debt settlement, interest and penalties continue to accrue on debt until a successful settlement is reached. With card credit debt settlement this fact can escalate the debt balance that you remain liable for if the credit card debt settlement process fails.

credit debt settlementCredit card debt settlement requires an immediate end to the use of the revolving credit line and an immediate cessation of payments to all creditors. This forces all your accounts to become delinquent and penalties result.


How Does Accruing Interest Affect Credit Card Debt Settlement?

With successful credit card debt settlement the agreed balance to be repaid is typically calculated with reference to the original balance owed at the time of debt settlement notification to creditors. In other words, the interest and penalties that later accrue on the account after you enroll in credit card debt settlement are waived. Successful credit card debt settlement normally involves negotiating a reduced percentage of the original balance at the point in time that the service provider notifies the creditor of their representation. However, with credit card debt settlement there is no guarantee of this happening.

It is important to note that credit card debt settlement negotiations don't typically begin until months after notification of settlement intention to creditors. This is because credit debt settlement requires that you build up adequate funds into an account for credit debt settlement to take place. During all this card debt settlement saving time interest and penalties build up.

In addition to card debt settlement success - possible failure outcomes of credit card debt settlement include:

a) One or more card creditors refuses to accept a credit card debt settlement (lump sum payment against a reduced balance) and "forces" a 100% repayment plan (under threat of litigation) based on the situation at the time of the negotiation. This could be months after you enrolled. Thus 100% equals the original balance plus interest and penalties accrued during the intervening settlement waiting period.

b) The card creditor proceeds to sue you.

Credit Card Debt Bankruptcy

One of the alternatives that people have is credit card debt bankruptcy. This may be pursued as an initial choice over credit card debt settlement and may be cheaper, or it may become the ultimate outcome of a failed credit card debt settlement where to avoid a forced repayment plan and litigation you have little choice left but to file bankruptcy.

Credit Card Debt Settlement Made Easy - How Settlement Works

Settlement Credit Card Debt With credit card debt settlement you sign up with a provider then immediately stop making credit card repayments. You must also have the accounts closed. Credit card debt settlement involves you saving money into a special new settlement trust account. This process is ongoing until you have enough money saved in order for the provider to attempt the credit card debt settlement.

Your provider typically negotiates with each separate creditor in sequence, that is, they deal with one creditor then the next. Each time any lump sum credit card debt settlement is agreed, your savings are used to pay this lump sum. You must then build up your savings again in readiness for the next attempt at credit card debt settlement.

If you are contemplating credit card debt settlement then you should be aware of credit card debt settlement pros and cons. Our article credit Debt Settlement Program refers. You can also learn more about what is involved and get credit card debt settlement tips be reading our general credit Debt Settlement articles.

Credit Card Debt Settlement

Acceptance into a program will depend on the amount of debt that you have. Each settlement credit card debt service will have its own qualification criteria. Settlement credit card debt needs to be of a certain amount. There will be a minimum balance owed requirement for each creditor involved (note creditor involved, not card involved). Credit cards debt settlement: If you have two cards from the same finance company then these may be counted as a combined account for the purpose of credit card debt settlement.

You may need to have a minimum of several hundred dollars debt on each separate account enrolled. In addition, there will be a grand total debt requirement. This may be for example $5,000 plus for settlement of credit card debt. What if I have multiple credit cards with varying amounts of debt? Other non-settlement alternatives for dealing with cards debt may be available. The decision to pursue credit card debt settlement should only be made after understanding alternatives. Credit card debt settlement is a process that lasts anywhere from a few months through several years and there is significant risk involved. Successful credit card debt settlement can save you a considerable amount of money compared to what you would have had to pay back. The average credit debt settlement process lasts for around two years. This is the amount of time necessary to build up cash and go through each credit debt settlement negotiation. We also take a look at the possibility of do it yourself credit card debt settlement.

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