5 Things You Need to Know About Credit Card Debt Negotiation
A majority of Americans owe money to credit card companies: your average cardholder has a debt of $6500, and that's only going up. And some of us just aren't going to be able 
to pay it all off. But rather than go into collections, it's possible to get your card closed and to negotiate a payment plan that both you and your credit card company can be happy with.
But if you want to go that route, you need to be ready. Here are five things you need to know.
- It's Really, Really Hard
Obviously, credit card companies would much rather you pay the full balance than only part of the balance. So they're not going to be open to the idea of a payment plan unless they see it as the more profitable option. Generally, that means you're three months behind on payments, and they have a choice of taking you to court, or selling your debt to a collector for pennies on the dollar and writing it off as a loss, which gives them a tax write-off. In short, they may be open to a payment plan, but to them, it's not their only option, and it may not be preferable to them.
It's even harder to go it alone. You've probably heard stories of debt negotiation companies that just add to their customers' problems or even fleece them, so you're leery, but at the same time, you don't want to go it alone. Well, take heart: you can do it alone if you want to, but it will be difficult. If you need a counselor, look for two things: one, that they work for a non-profit organization, and two, that they're members of the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. The downside is that this will have to include all of your credit cards, and they will all be closed.
Don't take their word for it on their membership, either: check to make sure. And, regardless of whether you have a counselor or are going it alone: do your research. For example, credit card companies have different types of debt negotiations: forbearances, lump-sum, and workout arrangement. You need to know what each are before picking up the phone.
For the record: forbearances delay your payments a few months, lump-sum means you pay off a set amount up front, and workout arrangements lock your card but cut or even eliminate interest on the debt.
2. You Will Be Making a Lot of Phone Calls, and Requesting a Lot of Letters
Letters and emails on this issue will simply be ignored. So, call and keep calling. Remember, the person you reach first likely doesn't have the authority to work out a payment plan with you, even if they claim otherwise. Ask for negotiations, collections, payment supervisors, anybody who can direct you to the right place. Once you get somebody who can actually help you, be sure to get their name, direct contact number, email, and any other information. Also, if they tell you something, be sure to get it in writing.
3. You Need To Pay As Much As You Can, Even If It's Below The Minimum
It’s important to show your willingness to pay your debts, even if you can’t meet the minimum payment. Just giving it your best effort can made some headway with the credit card company.
4. No Matter What Plan You Get, Your Credit Cards Will Be Closed Out
It's extremely unlikely that any card you get on a payment plan for will be usable.
5. It Is Possible
As hard as it sounds, it's possible, and you can do it. It's just going to take patience, hard work, and perseverance. But you can make it happen.
Image Credit:
http://www.icare-2b.org/wp-content/uploads/2011/07/Negotiation204.jpg
5-7-2012
by Chris Martin
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by Dan Seitz
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by Neil Hayashi
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