Negotiating credit card debt has become a popular alternative to bankruptcy, but it can be expensive when done through a debt negotiation company. If you are considering this option, you may want to try negotiating directly with your creditors first.

When you negotiate credit card debt, your goal is to end up paying only a percentage of your total balance, once you get agreement from your creditor.  Credit card companies typically only want to settle if you are behind on payments, usually by at least three months.  At that point, they are willing to negotiate debt because they fear that you may file bankruptcy, in which case they would lose all of their money, rather than just a portion thereof.  Creditors are also willing to work with you because you make your settlement payment in one lump sum – this is not a reduced or changed payment plan – so they are guaranteed to get that quantity of money.

Negotiating with your credit card company is as easy as making a phone call to the customer service department.  However, you will need to do a little preparation before you do so.  Begin with figuring out how much you can afford to pay as your settlement.  It should probably be at least %25 of your balance due if you are going to get a positive response from your creditor. Then make sure you have a clear picture of your financial situation – this will make it easier to explain over the phone.

When you do call, speak politely and concisely.  Explain calmly that you wish to pay off your debt and avoid bankruptcy but that you cannot afford to pay the total balance.  As part of your debt negotiation, ask that your account be reported as “paid in full”, or better yet, that your account history is deleted upon receipt of payment. Any other status reported will negatively affect your credit score.

Negotiating your credit card debt yourself can save you money, save your credit score, and get you out of debt.