On an average an American household is under credit card debt to the tune of more than $ 9,400. Even if you stop making any more purchases on your credit cards, it will be decades before you are completely debt free. Filing for bankruptcy is more difficult now, with the passage of the new bankruptcy legislation. The only way out is the option of debt consolidation by negotiating with your credit card company.
Do you have it in you to negotiate for better reimbursement schedule? It may be possible depending on your payment history in the past, the rate of interest and your current balance. Contact a number of credit card debt consolidation companies and ask for their quote. They will do so after going through your financial records. Compare the quotes and shortlist the ones that suit you.
You start the debt consolidation proceeding by making a call to your credit card company asking if the are ready to lower the rate of interest. With your history of paying on time, this is the only option and they may not be really interested. They may change their mind if you tell them that you have a better offer from their competitors. Surprisingly, they may be wiling to negotiate if you have fallen behind in your payments by as much as three months.
You could negotiate for:
– A lower rate of interest.
– You may be able to settle for a lump-sum against your outstanding balance, with your credit card company writing off the rest.
– You could ask them to rework a new payment plan.
They may be willing for a lump sum settlement, but where are you going to get money if they insist on immediate cash settlement. Moreover, the amount that gets written off is reported in your credit history as bad debt, and will remain for seven years.
You are unable to pay, and so you have nothing to lose by trying to negotiate.