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How to Achieve a Credit Card Debt Settlement

Are you worried about your mounting credit card debt? It happens, particularly in difficult economic times when you find yourself using more plastic than paper money for everyday expenses.

Debt Settlement Attorneys are taking on new clients all the time to help settle credit card debt. But, what does the process entail exactly? As long as you pay minimum payments, creditors are happy and will not negotiate a settlement with the debt settlement attorney representing you.

If you can’t even make your minimums every month, it’s time to consider a credit debt settlement. Credit debt settlement is an approach to reducing credit card debt in which the debtor and creditor agree on a lower balance that will be regarded by both parties as a full payment. The balance can be a number that will work for you and your current financial situation.  Speaking with a debt settlement attorney will give you a better understanding of how the process works.

Credit Card Debt: A Rising Tide
According to the Federal Reserve, revolving debt reached a record high of $943.5 billion in December 2008. The Federal Reserve also found that 4.34 percent of the credit card portfolios of the 100 largest banks that issue credit cards was delinquent in the third quarter of 2008. That’s no small sum.

How Does Credit Card Debt Settlement Work
At first glance, it may seem hard to believe that a creditor would take less than what you owe them to settle your outstanding credit card debt. But, if you’re falling further and further behind on your scheduled payments, they would much rather negotiate a credit debt settlement than not be paid at all.  The negotiations on your credit card debt can be handled by a debt settlement attorney that you hire to represent you.

Credit debt settlement companies or credit card debt attorneys negotiate on your behalf to reduce the overall debt. In exchange for an agreed upon lump sum, you are freed from your credit card debt. The amount you will still pay depends on several factors but can range anywhere between 35 and 50 percent of your total debt with the creditor.

While creditors can take proactive steps to garnish your wages or seize your property when you are delinquent on your payments, this is a fairly rare occurrence. That’s because the process of taking action against every person who is behind on their payments is simply unrealistic. Remember, the Federal Reserve says that’s about four percent of all credit card debt.

Now For the Hard Part.....
Credit card debt settlement isn’t a walk in the park. That may not be a news flash but just be prepared that your troubles don’t go away with the flick of a magic wand. Creditors don't want you to know about credit card debt settlement. And you won’t even be able to begin negotiations with your creditor if you are still making payments on your accounts.

This means that you have to step off that ledge and stop paying your bills. For most of us with a conscious, it’s not an easy thing to do. It’s distressing and can prove to be a heavy burden on our psyche. Find a debt settlement attorney you feel comfortable and confident with before you make the decision to stop paying your credit debt and begin to negotiate and settle it.

Most creditors won’t begin negotiating with customers until you haven’t made a payment for six months. In the meantime, you need to save money for your future lump sum payoff, all the while, dodging harassing phone calls from debt collectors.

Uncle Sam is watching, too. Consumers can face taxes on the amount that the creditor has forgiven.  Debt settlement specialists can help explain any tax implications that you may encounter while settling on your credit card debt.

Buyer Beware: Do Your Research
Credit debt settlement companies are sprouting up like weeds from an untended garden. That means for every reputable service, there are several who will prey on those in a particularly emotionally vulnerable situation.

You can approach the credit card debt settlement company on your own. However, you can also approach a credit card debt lawyer who specializes in resolving financial hardships. While you can take the tough road, and try to settle the debt on your own, it’s probably a good idea to consider an expert in the field.

There are horror stories of people who give credit debt settlement companies access to their bank account, allowing them to pull substantial fees on a monthly basis for a year or even more!

The Time to Take Action is NOW!
Being in credit card debt is a heavy psychological burden to carry. Nobody likes waking up in the morning worrying about how they are going to pay next month’s bills. Even if it takes you a couple years to find yourself free and clear of your debt, isn’t it satisfying to see a light at the end of tunnel?

One hidden advantage of hiring a credit debt settlement attorney is that they don’t have an emotional attachment to the situation. It’s your burden, so you are emotionally involved in the dilemma. A debt settlement lawyer can stoically negotiate on your behalf, and can even say things about you that will entice the creditor into agreeing to a settlement.

“It’s too emotional, and a lawyer can say things about clients that they never will, like he’s a deadbeat and you’re never going to get any more from him,” says Marc S. Stern, a bankruptcy lawyer in Seattle, Washington.

Consider contacting a credit card debt attorney in your area. In the current economic climate, creditors would prefer to negotiate with you and get something in return than just create another large delinquent debt that will never be paid.

Let can help you find a financial attorneyin your area that specializes in debt settlement

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