Card Credit Debt Letter Settlement

Type "card credit debt letter settlement" into any search engine and you will undoubtedly receive several testimonies from happy customers of companies who were hired to settle unpaid debt. As convincing as these testimonials sounds, you shouldn't pay someone else to settle your debt; you can do this yourself.

Learn tips for credit card debt elimination

Credit card account holders sometimes get behind on their payments, and the delinquent status on these accounts can reach a point where the credit card company realizes that it would be in their best interest to get some money instead of no money. Oftentimes this occurs after the debt has been sent to collections and perhaps even charged off.

A debt settlement might be initiated by the creditor or the consumer, but it is not legally binding until a card credit debt letter settlement is created. The settlement letter outlines the terms of the settlement and should list several items:

• The account number
• The existing balance
• The amount accepted for the settlement
• The date the settlement amount must be received by

It is extremely important to have a copy of this letter in your hands before you send the settlement amount to the creditor. Unless this letter has been drafted by the company and accepted by both you and them, the money you send may be applied only as a payment and the remaining balance will still be owed. You should not send this money solely based on a conversation with a collector. Always make sure you have the documentation before sending the payment, and keep a copy of this settlement letter in your files forever. This protects you if the company attempts to collect on this account again in the future.

You may wonder why a company would accept a settlement on a debt which barely equals half of what you actually owe. There are a couple of reasons for this:

• The creditor may have already assumed that they will receive nothing from your delinquent account, and therefore receiving around half of the balance is considered more than they would have otherwise received. Essentially, the creditor takes the stance that getting a portion of the balance from you is preferable to getting nothing at all.
• The account has probably already been sold to a collection agency for a small portion of the actual balance amount. The collection agency then aggressively pursues the delinquent account holder, and still manages to make a profit even when half of the balance is accepted as payment in full. In other words, you are not necessarily cheating the company which you ultimately pay.

Here is how to request a debt settlement letter:

• Contact the creditor to whom you owe money. The collections agent may be much more receptive if you initiate the call instead of having to chase you around to get a response.
• Tell the creditor how much you can pay. This is when you really have to make an attempt to bargain. Don't feel bad about proposing a settlement. You may say something along the lines of, "I know I owe $3500, but I have $1800 sitting in an account. Can I send you that and we'll call it even?"
• Prepare to haggle. The collections agent is probably well-versed in negotiation, so don't expect your first offer to immediately be accepted.
• Demand the settlement details in writing. Don't pay the amount immediately over the phone, even if that is what the collection agent pushes you to do. You need to have the settlement information on paper and in your possession before you send the company a dime.
• Make sure the settlement letter is accurate. You need to ensure that the letter you receive from the collection agent is indicative of the deal you agreed upon.

Even with a debt settlement letter agreement, your credit report will reflect the account as having been legally settled for less than the full amount. Although a settled account can be a ding on your report, it is far preferable to a delinquent account on your report.

File the settlement letter away with your other financial documents. This is a letter you should always keep, no matter how many years ago the settlement occurred.

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