#2 Negotiating with Credit Card Companies
Hiding from credit card companies will only make your problem worse. Take initiative and call your creditors. Let them know you’re trying to get out of debt and you’re having trouble making ends meet. Many credit card companies will lower your interest rate or negotiate smaller minimum monthly payments. Therefore to prevent your account from going to collections. If you’ve recently lost your job or if you’ve been ill or injured. You can ask your credit card company about options for people in your situation. Many companies have forbearance programs designed to lower or freeze payments. For recently unemployed individuals or people who have been unable to work due to a medical problem.
Request the terms of all negotiations in writing, and ask how the credit card company will report your arrangement to the credit bureaus. If the company wants to report the deal as a settlement, keep calling and asking for different terms. A settlement will reduce your debt, but it also negatively impacts your credit score nearly as much as if you don’t pay the debt at all.
#3 Collection Agencies
It’s far better to negotiate with your credit card companies before your debt is sold to a collections company. Even several late payments aren’t going to drag your credit score down as far as a charge-off.
The good news if your account is already in collections is that collection agencies will usually negotiate with you if you offer to pay your debt in full. You might be able to negotiate a payment that would turn out to be mere pennies on the dollar if you offer payment in full. Insist on written documentation proving the collection agency has agreed to accept the amount you’ve negotiated to pay before handing over the money.
Be careful when speaking to a representative from a collection agency. Each state has a statute of limitations on how long an agency can pursue payment for the debt.
Typically, that period begins on the day you stopped paying on the account, but making a promise to pay an agency and failing to follow through can reset the time period. Some collections agencies will even agree to request the account be removed from your credit report entirely once you’ve paid or mark the account as simply “paid” instead of “paid collection” or “settled.”