Worried about a large balance on your card statement? Want to know how to pay it off when the balance keeps growing? Maybe a credit card debt settlement letter is what you need. If you haven’t heard of it, now is the time to find out how useful it can be in your battle against debt.
So, what is a credit card debt repayment letter and how does it work?
In simple terms, this is a letter to your credit card company asking them to accept a lower amount as full settlement of the actual debt. Most often, the card company will fight the demand for a higher amount. You will then fight counter offers and negotiations begin. In the end, the two sides will come to an agreement. You end up with a reduced amount due within the agreed timeframe.
But why do credit card companies respond to debt settlement letters? Just because they want to make up for the total loss.
The card company will evaluate the situation after receiving your debt settlement letter. First, you may be late paying and in arrears. So they already know that you are in financial trouble.
They can ignore the letter and demand full payment, which may force you to declare bankruptcy. This could mean the end of collecting your debts. On the other hand, they can negotiate with you. Chances are, they’ll recover at least some of the money, especially since you’re the one taking the initiative. Given the choice, don’t you think they’d rather respond?
Don’t lie to yourself that writing a letter to pay off credit card debt is easy. You should consider the legal implications arising from the expression of the letter. Appropriate deductions for asking and receiving is another decision to make. What is the correct handling of tax issues related to their settlement? These and many other details you haven’t thought of. You should consult a credit card attorney or debt settlement agency for proper management.