For most consumers, the year 2010 has started with more credit card debt than any of us are comfortable with.
During these economic times, when the corporate giants are getting stimulus bailout packages, we also need help at a consumer level.
Terms and phrases like debt settlement, debt consolidation and debt management are getting our attention.
Debt settlement is one method which helps debtors in reducing the total debt amount.
Getting the best settlement offer depends on your current financial condition and the creditor you are dealing with.
The person negotiating the settlement has to show nerves of steel.
There are several strategies which can help you out with your settlement.
1.
If your debt amount is equal to or more than $ 10,000, then it is advisable to hire a debt settlement company to represent you during the negotiation.
However, you need to do some research before you hire a company.
Many of these companies are sponsored by credit card companies themselves.
You need to hire a company which has your best interests in their mind.
2.
If you have decided to settle the debt yourself, then you will need to call each one of your creditors and offer to settle your debt for a certain amount of lump sum payment.
Therefore, you will need to do some preparation beforehand.
Check with all your bank account and see if you have enough savings to negotiate a settlement.
Most companies will be willing to settle the account only if you can pay them immediately.
3.
It is also possible to get a hardship payment plan from your creditors.
For those customers who cannot manage to pat a lump sum amount, some of the creditors agree to remove the interest charges and penalty charges if the debtor signs in for a payment plan.
Interest charges and penalty charges can amount to as much as 50 % of the total balance.