Bank finance articles and tips

When you are drowning in credit card debt, sometimes it can seem as though bankruptcy is the only possible outcome. However, many card banks do offer alternative arrangements, including partial credit card settlement, workout agreement, or even simply a short-term bill reduction. These arrangements can make the difference between bankruptcy and keeping your finances afloat.

While these alternatives do sound like the perfect solution, there is a catch: credit card negotiation can be a long, arduous process. It is something that consumers can tackle themselves, but those in debt should expect to face a series of long phone calls and a frustrating search for random details of your financial history.

For those who think they are ready to brave the process, these are the steps that must be taken to negotiate your own credit card debt:

1. Determine What Solution You Want.

First and foremost, research the credit card settlement options available, and determine which option will work best for your situation. There are four primary settlement options available: lump-sum settlement, debt management plan, workout arrangement, and forbearance agreements.

2. Examine Your Own Debt.

Before approaching a bank or entering into any kind of negotiations, look at your own debt. It is generally helpful to request a breakdown of your bill from the credit card company. Then look closely at the bill and determine how you wound up it debt, and what kind of debt you are facing. This means, consider how much of the debt comes from actual expenditures and how much comes from late fees, over-the-limit fees, and other such penalties. Frequently, those in credit card debt are shocked to discover just how much of their debt comes from these kinds of penalties.

At this stage, it is also beneficial to look closely at your own income, to determine how much you are actually capable of paying. Construct a detailed budget so that you know what you can afford. This means that while you should not over extend yourself, it is important to factor in as much debt payment as possible.

3. Negotiate.

It is only in this third stage that you will actually contact the company and begin credit card negotiations. Be prepared for this to be a long, exhausting process, and for it to take a series of phone calls to get anything accomplished. Do not start with a letter or email, as they are frequently left unread, and are very rarely answered.

Remember, those who answer the phones initially are usually not those with the authority to help you with your problem, regardless of what they may say. You typically want to ask for the assistance of a more senior individual, such as a credit manager. Once you have the correct person on the phone, be direct about what it is you want, but remain calm throughout the process.

The Lee Law Firm aims to provide local residents with high quality legal representation at affordable rates. Their attorneys specialize in all aspects of credit negotiations. As Dallas debt lawyers, the Lee Law Firm attorneys understand the pressures their clients face as they battle a financial hardship.

By Chris Marvin Lee
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