Are you considering a debt settlement with the credit card companies? Do you understand how to seek this creditcard forgiveness? There is a system to learn and there are considerations you unquestionably should consider before you start toward settling these credit card balances.

Understand that credit card companies are in business for profit. Credit Card Companies will not settle with you if you are paying them. Why should they? If you pay on time or even every few months , the lenders will not negotiate with you. Is this good debt management? Of course not. Think and plan your clean up credit report strategy.

If you are  past due in your monthly payments, three to six months you are in a position to ask for a debt settlement. Creditors will not even consider settling for anything less than the full balance unless the card is seriously past due. A seriously past due account would be 120 plus days.

When you stop paying and are 180 days past due the creditor is most likely considering “charging off” the account. This is an accounting term and doesn’t mean you don’t owe the debt anymore, it simply means the creditor gains a tax advantage by “writing off” the debt as a ” not collectable” for which they get an expense reduction on their tax return.

When the credit card debt reaches this stage the creditor is now going to consider your request for settlement of the debt. Why? Consider this. If the creditor sells your debt they will likely get only three to five percent of what is owed them. For example, on a $5000 credit card balance the creditor will sell for between $150 to $250.  You will be offering considerably more-somewhere around twenty percent and this will entice them to consider your offer.

Be prepared to document everything, the name of the individual you speak with, date and time of conversation and notes concerning the capacity of the conversation. You should have a writing tablet dedicated for recording all information as opposed to scraps of paper which may get lost.

Finally, if you do make a deal, use certified mail with return receipt for all written correspondence.

When you are done, your next move is to increase your credit score. Don’t wait because it will take you some time to get your scores back up.