Credit cards can be extremely useful in their ability to add flexibility to your financial situation. However, there are many people that will simply take on too much credit card debt. While bankruptcy may be an option for escaping this debt, credit card settlement services may be another option.
How Do Credit Card Settlement Services Work?
When a person makes the decision to work with a credit card settlement service, they may not be sure as to how these services can provide debt relief. In most instances, these services will attempt to negotiate with the credit card company to resolve the debt as a lump sum payment. Generally, credit card companies want to avoid individuals entering bankruptcy as this can deprive them of any of the money that is owed. Due to this incentive, these companies are often willing to negotiate with credit card debt settlement services.
Why Are You Being Required to Make Regular Payments?
As part of representing individuals, it is common for these services to require them to make regular payments. These payments essentially go into a fund that will be used as the lump sum payment to the credit card company. By making regular payments into this fund, it will be possible to grow it so that the credit card company will be more receptive to settling the debt.
How Long Will the Credit Card Debt Settlement Process Take?
The entire process of negotiating a settlement with the credit card companies can take longer than individuals may assume. Typically, there will be a substantial number of offers and counteroffers that will have to be exchanged before a settlement is reached. As a result, it is common for individuals to have to wait for weeks or months before this process is complete. During this time, the credit card settlement service will discuss the offers that have been exchanged with you so that you can be informed when it comes time to make a decision as to whether to accept the terms.
Can a Credit Card Settlement Service Always Result in Debt Reductions?
While a professional credit card debt settlement service will be extremely effective at negotiating settlements for most of their clients, there can be instances where the credit card company refuses to settle the debt for a reasonable amount. Unfortunately, there is nothing that these services can do to compel the credit card company to accept your best offer. When this is the case, seeking the protection of bankruptcy may be the most effective solution for finding relief from your debts.Share