Credit Card Debt Self-Help

Is it possible to get yourself out of credit card debt? Yes, of course. You can call the credit card companies you owe money to and negotiate a settlement – sometimes. The credit card company may just hang up on you, but in this bad economy, many companies are dealing to keep their customers. The more customers they keep, the more fees they can assess and the more money they earn.

So you can get this process underway. But beware…to have a chance of doing a deal, you need to take it step by step, and it is a very long process.

First, decide what kind of a solution you want. There are several.

You can ask to pay a lump sum. This only works if you have some money stored away that you can use. Ask if they will waive some of the fees. They may or may not. See if you can pay the lump sum in 2 or 3 payments if you need to. Your credit score will take a hit and be listed as a charge-off.
You can ask for a workout arrangement, which is, basically, payments. Ask the creditor to forgive the fees. They may offer you a temporary arrangement until your finances are more stable, or permanent to pay off the balance. Your credit score will probably take a hit. Ask the company how they will report to the credit reporting bureaus so you can get it reported in the best possible light. They will probably stop your line of credit so you can’t use the card anymore.

If you don’t want to deal with the credit card companies themselves, hire a debt management company. Be sure they are reputable. Use one that belongs to the National Foundation for Credit Counseling or Association of Independent Consumer Credit Counseling Agencies. Or you can ask your bank for suggestions. There will be some fees to pay, but they are limited through an accredited company. Credit card companies are becoming more and more willing to work with them.
You can ask about their forbearance program. In this case, the company gives you a few months free from payments so you can get back on your feet.

Step 2 is to work out a budget so you know how much money you have to work with. Always go in knowing all the facts and with a battle plan.

Step 3 is to actually call the company. Ask the customer service rep for a manager higher up in the company. You can try asking for the workout arrangement department, loss mitigation, or perhaps settlement arrangements. Don’t waste time sending a letter. It will never get answered. Be ready to call again…and again… and again. You may have to call for several months before you get all the details worked out. Be fair. You owe the money. But try to get the best deal you can, get some of the fees waived, and set up a payment or other plan. Your efforts may very well be rewarded with a lower amount of debt.