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Is there a legal secret to settling credit card debt?

Contrary to debt settlement firms advertising the SECRET credit card companies do not want you to know, there is no secret to legally settling credit card debt.

Unsigned, credit card agreements are contracts between the credit card bank and the applying consumer. Like any contract, these contracts can be lawfully edited with the agreement of both sides. The most important legal aspect of negotiating credit card debt for the consumer, according to the Credit Card Debt Survival Guide, is getting the settlement and its terms in writing.

Can I settle my credit card debt while still making payments?

No you cannot do that. Just like mortgage banks, credit card banks will not negotiate with consumers who are current with their monthly payments. Otherwise, they would be losing money to everyone seeking to negotiate their credit card debt.

To settle a credit card debt for less than full value with the bank, a consumer will have to risk not making monthly credit card payments, then save those payments for a lump sum settlement. The risk comes from being in arrears and having the bank not agree to the lump sum amount.

How much of a balance reduction do credit card companies usually settle for?

On Internet consumer forums you can read of individuals negotiating credit card debt down to 20 to 70 percent of the current balance. Credit card banks prefer dealing directly with consumers rather than going through debt settlement companies, according to Charles Phelan, a debt settlement trainer. He also says consumers who negotiate on their own get the best settlements.

According to the Credit Card Debt Survival Guide, banks are most likely to settle for the lowest amount right before they write the account off as a loss. Six months after payments on an account stopped is generally when that happens. At this time it is common for a bank to approach the consumer with a settlement offer. Before this period, when a consumer in arrears approaches the bank with a settlement offer, the bank wants to see evidence of need such as low income, job loss, family death, illness, etc.

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4. If the Day Comes When You Cannot Make Your Monthly Credit Card Debt Payments, What Do You Do?
5. How to Get Credit Card Debt Collectors to Focus Their Energy Elsewhere