How to negotiate outstanding debt with a credit card company

Negotiating payment with a credit card company can be a stressful situation for some people. The important thing is to be honest, communicate in a easily understandable way, and to always get any agreement you make in writing. Also, knowing your rights as a consumer when it comes to federal credit card and debt collection laws is important in ensuring you aren’t taken advantage of or harassed. Here is some advice to help.


Do

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  • know where you stand
  • be honest with yourself
  • communicate
  • understand what to expect
  • be diligent
Don't

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  • lie
  • expect miracles
  • forget to look at the details
  • get discouraged
  • forget to get it in writing

Mark Schiffman‘s recommendation to ExpertBeacon readers: Do

Do know where you stand

Take a close look at your income and the debts you owe each month to get a handle on how much you have coming in versus how much you have going out. This includes the type of debt it is, length of repayment, minimum payments due, and interest being assessed on the debt.

Do be honest with yourself

You can’t make real improvements without being honest with yourself about assessing income versus debt to determine the real scope of the problem. Also, look forward to determine how long the situation may last as this will impact your plan of attack to reduce your debt.

Do communicate

Contact the credit card companies to whom you owe money and let them know you are having financial difficulties. They may ask you questions about your situation to assess the extent of your hardship and determine what options may apply to assist. Be honest with your creditors to find the best avenue to work out an arrangement that works.

Do understand what to expect

A consumer has a responsibility to repay a rightfully owed debt. A creditor such as a credit card company understands that emergencies happen (e.g., illness, unemployment, financial hardship) and is not obligated to help but most want to try to be of assistance to recover some of the money owed. There is no provision whereby a creditor has to simply just forgive a debt. If amenable, they’ll try to work out a mutually beneficial deferment or repayment arrangement based on your situation.

Do be diligent

Eliminating debt isn’t an easy or quick proposition. Achieving financial goals, such as eliminating debt, takes a commitment to accomplishing consistent baby steps leading to your long-term goal. Be prepared to do the hard work yourself but be open to possible avenues that may provide some level of help.


Mark Schiffman‘s professional advice to ExpertBeacon readers: Don't

Do not lie

Honesty is the best policy in working with creditors. Be truthful about your situation and your ability to repay what is owed. If you are honest in working with creditors they most often will be honest working with you.

Do not expect miracles

Creditors can help relieve a financial burden by stretching out payments, reducing interest rates or lowering monthly payments due, but they won’t simply eliminate the debt burden for you. A consumer has a contractual obligation to repay the credit they received.

Do not forget to look at the details

While stretching out repayment amounts may help in the short-term it may also mean that you will be spending more to pay off a debt in the long-term. This may be worth the cost by reducing the monthly amount owed but don’t be surprised that the bottom line increases the longer it takes to repay the debt.

Do not get discouraged

It’s a marathon, not a sprint. If you get knocked-off track get right back on so you can finish the race. Don’t let a small set back derail the hard work you have started or the positive gains made.

Do not forget to get it in writing

When negotiating debt with a credit card company, regardless of the agreed upon arrangement, be sure to to get the agreement in writing to legally protect yourself should it be necessary.


Summary

It’s possible to successfully negotiate debt with a credit card company, but it is imperative that consumers know their rights when it comes to federal credit card laws. Do your homework first, that way you’ll be ready to have productive dialogue from outset and be able to negotiate effectively.

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