Credit Card Debt Negotiation Process Explained

A common misconception amongst many consumers is that the only way to get rid of credit card debt is by either paying it off or by filing for bankruptcy. Many times paying it off just isn’t possible due to financial constraints and declaring bankruptcy can hurt an individual many more ways than just financially so that should be avoided at all costs.

Another alternative that makes sense for a great many people is credit card debt negotiation. This is accomplished by working with a well-trained representative of a reputable debt settlement company who will work directly with the credit card companies that are owed money in order to reach a viable solution that is agreeable to both the creditor and debtor.

How It Works

When dealing with debt it’s all about the numbers. What happens in credit debt negotiation is the debt negotiator or debt arbitrator will work out a financial settlement price as a percentage of the whole. For example; if the cardholder is $25,000 in debt the negotiator works with the bank or financial institution to reduce it to $12,000 and the remaining $13,000 is then written off or forgiven.

That is of course a simplified explanation of how it works but I believe it conveys the general idea behind credit card debt negotiation. Another positive is that it will stop the collectors from contacting the debtor at home or at work through phone calls and threatening letters. All correspondence automatically goes through the debt settlement company.

Finding a Reputable Company

It is absolutely imperative that any individual interested in working with an organization to negotiate their credit card debt does their homework in advance to make sure that that company is in fact reputable. The very first thing to do is to contact the Better Business Bureau to make sure that there are no outstanding complaints.

The next thing you want to do is go online and do thorough research. I’m talking about spending hours and doing it right. Search consumer watchdog sites, forums and any and all other information sources that you can find. Don’t be afraid to use the search box on Google. That’s what it’s there for.

Questions to Ask

Asking questions is a big deal when it comes to finding the right debt negotiation company. You’re going to want to know what the training and credentials of the negotiator that will be assigned to you are. You’re also going to want to get a guarantee that they will do exactly what they claim they will do.

Because this is new to you you will no doubt have a great many questions to ask about how the program works. Write them down in advance so you do not forget them. If you feel as though the representative is evasive or does not answer your questions to your satisfaction then move on to another company.

It is your financial future that is at stake so take the time to educate yourself as much as you possibly can about how the credit card debt negotiation process works. The more you know the better off you’ll be and the quicker you will become debt free.