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Best DIY (Do it Yourself) Credit Card Debt Settlement

Are you looking for the best DIY (Do it yourself) credit card debt settlement solution? If so, there are some basic and fairly easy steps to follow if you want clean up all your CC debts, and perhaps consolidate all your debts into one debt. You don’t want to go all half cocked in this process all by yourself unless you have educated yourself on the proper order in which to go about it. Below we discuss the steps to about clearing off bad CC debt, and what you will need to successfully get a new financial start with the credit agencies and credit card providers.

Should You Even Bother Doing it Yourself?

The most important question is whether or not you should try and negotiate a settlement with your credit card companies on your own. Yes, if you hire professional counselors, trustees, lawyers, or a debt consolidation firm, you are going to have a much easier time with your settlement, and yes, you will have to pay for it. Sometimes more than $2000-$3000 in a worst case scenario. If you decide not to do it yourself, then make sure you hire a debt settlement company when you have the least amount of creditors as possible – this will decrease the bill you get.

If you do decide to go the DIY route, the same principal applies – get rid of as many credit accounts as possible by paying off the highest interest accounts with money from the lowest interest accounts first. It’s much easier to negotiate debt settlements with 4 credit card companies than 12 companies!!

DIY Credit Card Debt Negotiation

When your credit card debts have reached the point of no return you are going to have to negotiate a payment plan with your creditors which satisfies them, and at the same time makes your monthly payment(s) manageable. The key to negotiating your payment plans is to contact all your credit card companies (Visa, Mastercard, American Express, Discover, Department Store, and Gas Station) BEFORE they sell your account to a collection agency. Most credit card companies will negotiate in good faith if you have only been deliquent for short period of time. Usually this is under six months at least.

When you tell each CC company that you want to take part in a debt settlement program, and that you want to personally negotiate your repayment amounts (pennies on the dollar), they will begin by asking for the highest amount possible (of course). Your job is to aggressively haggle with your creditors until they are almost fed up with you. You need to negotiate and settle on the lowest possible amount of repayment on your bad debt.

If the banks or CC companies think that you are still quite solvent, and that you have a good paying job, they will most certainly try and squeeze as much money out of you as possible. Stand firm and get the best deal you possibly can.

DIY Credit Card Debt Settlement

The settlement with your creditors can be cordial and straight forward. You will need to have the most recent credit card statement for all of the different cards you currently have. You will need to have a specific payment schedule that you can afford to offer to each company.

You will need have a some documentation of you own, and at CLF we suggest using some software for that you can run on your Mac or PC personal computer. You can use some specific software for your DIY debt settlement, or just a good old fashioned spreadsheet using a piece of software like Excel. You can run Windows programs on your Mac now, so there should be no excuses when it comes to getting organized.

Set up your spreadsheet in such a way that lists all your creditors in a column. So you should have a column for American Express, Visa, Discover, Mastercard, Department Stores, Esso, Exxon, etc. Then you need to create a column for the amount you owe each CC company. You need a column to enter in the last time you made a payment, a column for the interest rate of each card, a column for the contact phone number of each company. You should also have a column to enter updates and information regarding each settlement you are trying to make.

You can list the problem settlements higher in the spreadsheet, and have the most difficult settlement comments highlighted for your special attention. You can keep a complete log on what was discussed on the telephone, and each creditor’s column can have references the dates of the documents you have filed away neatly – neatly right!?

It’s now your job to use every communication method and medium to your advantage. Keep detailed records and logs of all conversations on the phone, emails, and paper documents. You need to keep track of all the different representatives and what they have told you, offered you, and informed you of. Like I said, it does not have to be a negative experience here – you CAN have a civil settlement made with these credit card companies – as long as file(s) has not be moved (bought out by) a collection (third party) agency.

DIY Collection Agency Management

If any of your credit card companies have sold your file to a third-party collection agency then it’s a little more difficult to manage. These collection agencies will buy your debt from a credit card company for a small percentage of the total debt you owe. The bank or CC company wins because they are guaranteed a settlement in the form of a lump sum payment from the collection agency, and the collection agency wins because they can now make a profit by collecting more money from you than they paid the CC company for your file. Seems nasty, manipulative, and illegal, but I assure you, this is very much a legal course of action and transaction between the collection agent and the CC company.

So for example, let’s say you owe Visa $5000 dollars and Visa sells your file to a collection agency for a tidy sum of $750 dollars. Visa rights off the loss on their taxes as a charge off, and recoups their $750. They’re done.

Now the collection agency goes to work on you and they use every dirty trick possible (and they bend the law as much as possible usually) to frighten and shame you into paying your bill. Their tactics of shame and guilt work well usually with women, and younger men, however older men generally prove to be very problematic because they don’t really care what collection agencies say or do. The truth is the collection companies don’t have much power under the law, and make their profit from simply making consumers “feel bad” – enough that they cough up some of the money owed.

So if the collection agent calls you enough times on the phone, and sends enough threatening letters, resulting in you sending them $2000 of the total you owed Visa, then they have made a $1250 dollar profit for their dirty work. It won’t help your credit rating much at this point, so make sure you give collection companies as little as humanly possible.

You need to know the law regarding what third party collection agents can say and do to, so do your homework in the State of California, or anywhere else in the USA.