Trouble keeping up with your credit card bill
If you have trouble keeping up with your credit card bill, you are not alone. According to a 2017 Bureau report, global credit card debt increased by 13% between 2015 and 2017, while that of people with low credit ratings increased by 22%. percent.
Even if you are in a difficult situation, if you have lost your job, if you have a family illness or are facing an emergency, you still have options. The faster you act on these options, the better your chances of avoiding a debt claim, damage to your credit history, a possible lawsuit or bankruptcy.
Address your credit card debt with your credit card company
Contact your credit card company. If you are considering missing a credit card payment or have already done so, contact your credit card company as soon as possible. Many will work with you to find a repayment plan tailored to your current situation. Once you are late or miss a payment, you are considered to be late. If you do not pay, the credit card company may block your ability to use your credit card and report the delay to the credit investigation companies. As a rule, this unpaid can stay on your credit file for up to seven years. You can also face a debt recovery and be sued.
Check out the refund options offered by your credit card company. Credit card companies can, and often do, offer other repayment options. They depend, among other factors, on your income, the amount you can afford to pay and the amount you owe. They offer loss mitigation programs, sometimes referred to as abstention or deprivation programs. Often, these programs allow you to defer a fixed number of monthly payments or pay a lower monthly payment at a reduced interest rate until you pay the balance in full. If the credit card company believes that you can not afford a full repayment plan within a specified period of time, you may be able to negotiate debt settlement for less than you owe. It depends on the policies of the company and the circumstances of your account. Do not forget to ask for a written confirmation of any other repayment option you agree with.
Debt settlement companies are usually for-profit companies that often declare that they can negotiate with your credit card company to reduce the amount you owe e. Credit card companies generally do not have special offers available only for debt settlement companies, so you pay the Debt settlement company for the job that you can do yourself. Generally, the debt settlement company will ask you to stop any payment and will ask you to stop communicating directly with your credit card company. Stopping payments could have a negative effect
impact on your solvency that you could avoid by working directly with the credit card company. The cessation of payments may also give rise to legal action. filed against you by the credit card company or a collection agent.
Debt settlement companies charge fees, often between 20% and 25% (or more) of the debt settled. You can also face additional fees. You must carefully review all the terms and conditions of the fees and expenses of the debt settlement company. know your rights. For example, it is illegal for companies that sell debt settlement services and other debt relief services over the phone to charge fees before settling their debt.
In addition, although credit card companies’ own loss mitigation policies are available to all eligible consumers, according to the Bureau’s 2017 report, credit card companies will often not work with settlement companies. of debts.
Cost Comparison: Debt Settlement Company and Credit Card Company
To better understand the difference between working directly with your credit card company and a debt settlement company, consider an example of a $ 10,000 credit card balance that has been outstanding for more than 120 days. This example assumes that the credit card company would accept a 60% settlement on a $ 10,000 debt, which means you pay $ 6,000 plus any fees if you work with a debt settlement company.