Do It Yourself Card Credit Debt Settlement

Negotiating Basics

Prepare Before You Call

When you are preparing to call a creditor to make a settlement arrangement, it is important to have everything you need in front of you. This includes the following:

• A copy of your most recent bill
• Letters from the creditor offering a settlement
• A specific amount you are able to pay should a settlement be reached- either a lump sum or a monthly payment amount

Making the Call to a Creditor

If your account is seriously past due, such as 4-6 months in arrears, don't expect the collection department to be cordial. Collectors are trained to verify your personal information, such as phone number, employment and home address, and then to get a payment from you. Occasionally these collectors are well versed in settlement arrangements, while others will refuse any settlement agreement. Make it clear that you are willing to make a payment or are interested in a settlement at the beginning of the call.

Speak With Someone in Charge

Talking with a collector who refuses to budge can be a very frustrating experience. If this happens to you, there are three options available to you:

• Terminate the call, but do so as politely as possible, using profane language only makes things worse. Remember, most calls are actually monitored and recorded.
• Ask to speak to a supervisor or department manager. These individuals want to make reasonable payment arrangements or settlements.
• Write a letter addressed to the department manager or the president of the company outlining your plan to pay off or settle the account. Be very specific in regards to the dollar amount you will be paying and the dates you will be making the payments.

Favorable Credit Settlements

The goal of settling an account is to get it reduced to a manageable amount. You want all late fees, finance charges and over the limit fees removed from your account. Typically, these three things will amount to 30-40 percent of the total balance. If a creditor is unwilling to settle within the 30-40 percent range, decline to make an arrangement at that time. Odds are in your favor that they will send you a settlement letter within a few weeks that is more favorable to you. While this may be aggravating, waiting out the creditor may save you money in the end.

Do it Yourself Card Credit Debt Settlement Don'ts

There are some things that can derail your efforts to settle your credit card debt. Avoid these pitfalls so that you can rid yourself of creditors and begin to rebuild your credit.

• Keep a record of all of your conversations with creditors and include the date, time and the person's name you spoke with. It may come in handy later if there is a dispute over payment or settlement arrangements.
• Don't argue with collectors or use profane language. Your phone call is often recorded and it may make creditors less likely to offer you a favorable settlement amount.
• Don't write paid in full on any checks you write to a creditor, especially if it is an amount that wasn't agreed upon. It is an urban legend that if a creditor cashes the check with this written on it, the debt will be considered settled.
• Always get a letter from the creditor with the agreed upon amount of the settlement or similar payment arrangement. A verbal agreement isn't valid in many states and it would be your word against the collector.
• Know your rights as a consumer. Many collectors are counting on you not knowing your rights so that they can intimidate you. Find out what your rights are as outlined by the Fair Debt Collection Practices Act by visiting The Federal Trade Commission.

Conclusion

A do it yourself card credit debt settlement is possible if you prepare yourself. Have copies of your most current bill or settlement offer letter on hand before you call a creditor. If you have trouble getting someone to make payment or settlement arrangements, go directly to the person in charge. It is also important to keep your cool under pressure, never use profanity when talking to a creditor. Finally, if you are unsure of your rights as a consumer, visit The Federal Reserve Board and research the credit card laws in your state.