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When an individual’s finances are
overburdened, they might do well to consider a debt settlement. This
approach differs from consolidation in that accounts are closed with no
further payments made. Debt settlement is usually a person’s last
resort before having to declare bankruptcy.
Most of the time a credit card company will
not settle your account unless you are in collections. Their collection
agencies will not usually offer this option; you will have to purpose
it. Typically, your account stays with an outside agency for thirty
days, and then it is moved down the line to a second, then even a third
agency. As this happens the percentage an agency makes on your past due
lessens so they are more willing to settle the longer your account has
been delinquent. But you need to proceed with caution here, the longer
your accounts stay open the worse it is for your overall credit rating.
Debt settlement is tricky to maneuver without spoiling your already
blemished credit any further.
A place to start is to look over all your
existing over-due bills and settle the ones that are the oldest. Then
contact either the collection agencies that have been sending all those
nasty letters or the lender themselves; if they aren’t a credit card
company. A one-time lump sum can be offered, a smaller percentage of
what is owed as debt settlement, but this payment will have to be made
immediately. |
