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Settling Credit Card Debt Without A Debt Settlement Company

Overview of Debt Settlement

There are many benefits to settling credit card debts. Even more benefits if you can settle credit card debt without a debt settlement company. By forgoing the settlement company, the borrower saves the fees that are tacked on by the company, therefore greatly reducing the size of the debt owed to the credit card lender. By reaching a debt settlement agreement prior to the debt being passed to the debt company, the debtor can save an incredible amount in the reduction of fees.

When a debt settlement company gets involved, it is much harder to reach a settlement. When a company is involved, the borrower adds on another creditor making it even harder to get out of. The borrower will then have to pay back the debt company the original debt plus the fees added on by the debt company. So reaching a settlement with the creditor prior to a settlement company getting involved is always ideal.

Tips to Settle Credit Card Debt

In order to settle the credit card debt independently, there are things that the borrower must have available and specific things they need to know prior to placing their call to the credit card lender. They are:

  • All paperwork from lender to borrower
    This includes a recent credit card statement along with any past due notices and any settlement notices from lender.
  • A settlement figure they are willing to agree to
    Before placing the call to the credit card company, the borrow needs to come up with a realistic settlement amount to present to the lender. This figure can be a lump sum payment or a reduction of the monthly payment.
  • The borrower will also need to know how long the debt has been past due
    The length of time plays a pivotal role in just how willing the lender will be in reaching a credit card debt settlement.
  • When dealing with the lender, the borrower needs to always refrain from becoming frustrated and argumentative
    In doing this, the borrower is more likely to reach a settlement with the lender. Even if a settlement is not reached at that time, the borrow still needs to act in a courteous and mannerly way.
  • Borrowers should push for removal of fees and penalties
    By doing this the borrower greatly reduces the amount of the debt owed to lender.

When calling the credit card lender, the borrower must always keep in mind that the goal is to reduce the credit card debt amount, not to completely wipe away the debt. By the borrower getting the credit card lender to remove the fees and penalties, the credit card debt settlement is much more manageable.

An Important Side Note

It is important to know that not all borrowers will be able to reach a settlement on their credit card debt. It is also important to know that not all settlements will be reached prior to a debt settlement company gets involved. It is equally important to note, that it is always worth a try. It may also be a good idea to check your credit history and ordering a copy to make sure there are no unknown or incorrect marks on your credit file.
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4 Responses

  1. Default Gravatar
    MollyJuly 7, 2017

    Hi, We have 3 credit cards and about 18 months ago we contacted one of those dept help assist companies to deal on our behalf to claim financial hardship and so bascially that was all good interest was frozen and we made minimal repayments, however not so long ago this dept help company has gone into receivership and we were stuck. I then contact the banks directly and we negotiated for another 6 months which is great. Basically in a few weeks we will have enough money pay them out however we were told that you can make them an offer to settle the debt and one of them have accepted around 20% off what is owing $13500 Now my question is what is recorded on the Credit File, will they listed at Default or as settled now sure where to call and ask.

    • Staff
      JonathanJuly 11, 2017Staff

      Hello Molly!

      Thanks for the inquiry! We know you’re working hard to get this all taken cared of. :)

      Debt settlement companies may declare “paid”, “settled” or “paid as agreed” on your credit file, depending on their internal procedure and differentiation. We recommend that you consult with your settlement company to verify which one they put on the file of their customers who are paying less than the actual balance.

      Hope this helps.


  2. Default Gravatar
    DarrenAugust 25, 2014

    If I have a credit card debt of $35k with a bank, but also have a property valued at $500k and a loan with them of $335k, can the bank do anything with the property I have if I stop paying the credit card off?

    • Staff
      ShirleyAugust 27, 2014Staff

      Hi Darren,

      Thanks for your question.

      Please check the product disclosure statement of your credit card, under the financial hardship section. It should state what the course of action is if your financial commitments can not be met.

      In most cases, your debt is transferred to a debt collector, and new payment terms can be made.


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