Fortunately there is a way to get your credit card companies to renegotiate with you to reduce your total bill. In fact, you can even persuade them to accept a dollar amount that completely wipes out your entire bill, settling it in full.
This strategy of debt renegotiation is called credit card debt settlement.
You can either do it yourself or hire a settlement company to do it for you. Of course if you do it yourself you’ll save the cost of hiring another service. How successful you will be in renegotiating your payments with your creditors depends on how well you plan your negotiations.
Here is a strategy you can use to slash your overall bill by as much as 60 percent of what you owe.
Step 1. Either by writing a formal letter or by picking up the phone, dialing customer service, and asking to speak to someone in the settlement department, you can take the first step of informing your card company about how you are not earning enough to pay their bill in full. You can ask for several things at this point. The first thing you could ask for is to have your interest rate reduced. The second thing you could ask for is to have a hold put on your interest until a certain date so that you can earn enough to catch up on your debt. The third thing you could ask for is to have a reduction in your total debt amount. Usually, at this point, the charge card company is not willing to compromise with you because they don’t care if you go bankrupt trying to pay them off.
Step 2. You now stop making all payments to the charge account credit. Instead you now put all the money you were using to pay them into a savings account.
Step 3. The charge card company will now decide to harass you with collection calls. Instead of ignoring these calls, answer each one, and with every call say that you will pay only a settlement cost of 40 percent of what you owe. Initially, they will not accept it. It may take from three to six months before they begin to worry that you will not pay them anything at all. Once they agree to your terms, be sure to get it in writing. After you have received written confirmation, you can send the money that has been building up in your savings account.