Can You Negotiate Debt with a Credit Card Company?
According to The Balance, the average Floridian carries over $8,000 in credit card debt. With high interest rates, this debt can become unsustainable. Many people would like to negotiate with their credit card company. But is that possible?
The answer is a big “maybe.” Credit card companies differ in their willingness to negotiate with clients. A lot depends on what you are seeking and how far you have fallen behind.
Identify Your Goals
Before picking up the phone, identify what concession you hope to get from the credit card company. Some options include:
- Lowering your interest rate
- Waiving late fees and penalties
- Skipping payments for a few months
- Reducing the minimum monthly balance
- Forgiving some of the balance in exchange for a lump sum payment
You are more likely to get a credit card company to agree to lowering interest rate and waiving late fees than having them forgive any or all of the debt.
Many credit card companies also have hardship plans in place which you might enroll in. For example, a company might let you suspend payments for a few months and then start over if you have suffered job loss or other temporary setback.
Understand How the Credit Card Company Thinks
Like other businesses, credit card companies want to maximize their profits. Ideally, they would get you to pay off everything that you owe. However, that is not always possible, and they realize that.
Some points to consider:
- Are you in default? If you have not missed any monthly payments, then the credit card company might not feel it has to negotiate with you.
- Are you out of a job, or have you suffered an injury or illness that prevents you from working? The likelihood of paying back your debt declines dramatically in that case.
- Will your financial prospects improve? If so, then the company might be willing to cut you a break for a few months, but they are unlikely to forgive debt.
Credit card companies are also afraid of debtors who file for bankruptcy. Credit card debt is unsecured, and you can wipe it out easily in a Chapter 7. This means the company will be left without anything.
Pick Up the Phone
Tell whoever answers that you are struggling to pay your credit card bill and you want to discuss your options. Credit card companies often have “loss mitigation” departments, so don’t be surprised if you get sent there. Ask for a name of the representative if they do not offer it and take careful notes of the conversation.
Be Bold & Persistent
There is no easy way to negotiate. Instead, honesty is often the best policy. State what you want. If you have $3,000 on hand, you can make a lump sum offer in exchange for wiping out, say, the rest of a $6,000 debt.
Always remember to mention that you are thinking of filing for bankruptcy. This reality might make the issuer take your offer more seriously. However, you might need to call back later if they reject your first offer. Negotiation involves give and take, so don’t expect a quick yes.
File for Bankruptcy Instead
Rather than try to negotiate with a creditor, wipe out the debt easily with a Chapter 7 bankruptcy. At Nowack & Olson, PLLC, we can save you time and money by getting your bankruptcy paperwork filed correctly in the right court. All creditor collection actions will cease from the day you file.
Call us at 888-813-4737 to speak with one of our Plantation bankruptcy attorneys.