If you're being hassled by credit card companies or worse yet, debt collectors, you can feel as if you entire life has been turned upside down. You'd love to get your debts under control but you simply don't know how to do it. When you don't have a plan for reaching that goal - of getting your debts under control - it's like setting sail with no rudder. You could end up just going around in circles and never solve your credit card debt problems.
Have you considered debt settlement?
Many families have found that the best way to eliminate credit card debt is through a strategy called debt settlement. This isn't easy but it's the only way short of filing for bankruptcy that you can actually eliminate credit card debt. Yes, there are ways that you can consolidate your debts through a debt consolidation loan or consumer credit counseling but neither of these can reduce your debt. All they can do is make it easier for you to pay back what you owe.
50 cents on the dollar
In comparison, with debt settlement you can actually get your debts reduced by as much as 50% or maybe even more. But spoiler alert - you have to be a good negotiator and you have to be pretty hard-nosed to pull this off.
Here's how it works
First, you'll have to stop making all payments on your credit cards for at least six months. This means even the minimum monthly payments. It won't be long before you start hearing from your credit card providers. But you must ignore any letters or phone calls you receive. You will need to sock away the money you would have paid on your credit cards as you will need it to eventually settle your debts (more about this later).
After six months
You may even start getting calls from debt collectors before the end of the six months. Again, you need to stand firm and make no payments no matter how much pressure the collector applies.
Now you need to total up all your credit card debt and cut the amount in half. Next, you will need to determine how much you have in savings, the cash flow from your monthly income and any other resources you could use to settle your debts. The objective is to have enough to pay 50% of your combined debt.
Contact your credit card companies
After at least six months have elapsed, you can start contacting your credit card companies and making settlement offers. Here is where you will have to be tough minded and the nerves of a cat burglar. As you can imagine, the credit card companies will not be anxious to settle for fifty cents on the dollar. You must be able to convince them that either they settle or you will file for bankruptcy. This means you must have your "arguments" ready so that you can sell this successfully.
Wire the money or send a cashier's check
If the credit card company does agree to settle, you have to have the money available to either wire it or send it in the form of a cashier's check immediately. This is why it was important, as noted above, to make sure that you have enough cash on hand to pay 50% of your debts.
A fact and not a fiction
In short, debt settlement is a fact and not a fiction. You will need a fair amount of intestinal fortitude to pull it off but it can be done. And as many experts will tell you, it's the best way to actually reduce debt and not just move it from one set of lenders to another.
Source by Adriana Spears