Settling your credit card debt means that, the creditor or the collection agency, has agreed to accept an amount less than the total balance as full payment.
Let's say you owe $1000 to your creditors then you might have to convince them to settle your account for $500.
It will take time, patience and excellent negotiation skills to bargain such a settlement.
1.
Start with stopping all payments to your account.
Your creditor will not settle your account till he keeps getting regular payments on it.
Only when the payment has been delayed by 120 days to 180 days do the creditors seriously consider settling with their debtors.
2.
Not paying on the account will not be easy as you will start getting collection calls from your creditors on a regular basis.
They might even threaten to sue you, or garnish your wages or take away your car or house.
However, the truth is that most creditors will not want to incur an extra cost of legal proceedings.
3.
Call your credit card company and make a settlement offer to them.
Explain your financial condition and tell them that the offered amount is the best you can give them.
The only other way out for you will be to file for bankruptcy.
Creditors who lend unsecured loan are at a complete loss if the debtor files for bankruptcy.
So, the chances of them taking up on your offer are high.
Do not offer an amount that you cannot afford.
4.
While negotiating it is best to open your offer as low as possible.
It is advisable to start at 25 % of the current balance.
Be prepared for the offer to get rejected.
Mostly, a good negotiation can get you a waiver of about 40 % to 60 % of the total debt amount.