How You Can Negotiate a Reduction in Credit Card Balances?

This following guest article is from: CreditCardDebtChampions.com

Credit card debt is a common problem shared by many millions of people. While some people who carry credit card balances today are able to comfortably manage to pay the minimum monthly payments on their credit card accounts, other people find it very challenging to make minimum payments on their debts each month. In years past, bankruptcy was considered to be the most viable solution to significant debt issues, and this was a solution that provided the greatest level of debt relief. Now, however, debt negotiations may provide you with more significant and lasting results.

How Debt Negotiation Works
Through the process of debt negotiations, you negotiate a reduction in outstanding balances with your creditors. Creditors of unsecured debts understand that they have very little ability to collect on your debts if you do not have the ability to pay. With an auto loan or a home mortgage, when parents are not made, the car or home could be repossessed. With credit card debts, credit card companies may send your account to collections, but they cannot take property or assets away from you. Because of this, they often are very willing to negotiate a reduction in balances with you if they believe it will help you to pay them back at least some of the money you owe them.

Self-Negotiations
Debt negotiation can be accomplished in one of two ways. First, you can consider negotiating debts yourself, or you can consider hiring the services of a professional debt negotiation company. Negotiating with your creditors on your own can save you money. However, you should be aware that the best negotiation results are usually experienced when negotiating skills and strategies are put to use. Further, understanding debtor rights can also help to improve the results you enjoy from debt negotiations.

Professional Services
While negotiating with creditors on your own may provide some results and may save you from having to pay the fees of a professional negotiation service, often the results enjoyed by hiring a professional debt settlement and negotiation company are well worth paying for. In some cases, professional negotiators have been able to reduce debt balances by thirty or forty percent, if not more. The results will vary from person to person, and there is no guarantee that any results at all will be enjoyed through this process. Some of the top companies that you can choose to work with offer a fee based on results. This fee structure helps to ensure that you pay for tangible benefits you receive as a result of using a negotiation company’s services.

Debt negotiations may still result in a negative event on your credit report, just as bankruptcy does. However, the overall benefits of negotiations are improved over bankruptcy in many cases. In addition, the severity of negative event on the credit rating is generally reduced. Because of this debt settlement is a great option to consider for a quick reduction in credit card balances. By reducing credit card balances, monthly payments become more manageable and remaining outstanding balances can be paid down more quickly.

How To Use A Home Equity Loan To Settle Credit Card Debt

Settling your debt is something that you need to do as soon as possible. There is no need to live with the burden that your debt causes on a daily basis. Why live with the stress of not being able to answer your phone because you think it might be another collection call? Do yourself a favor by getting out of debt today.

Use The Equity In Your Home As A Funding Source

The equity in your home could be exactly what you need in order to get your debt squared away. Take the money that you get from your equity loan to cover any outstanding debts you have now. All you have to do is make sure that you can pay back your equity loan. Make sure you don’t lose your house because you cannot repay the equity loan.

Enroll In A Debt Settlement Program

Enrolling in a debt settlement program can make it easier to settle your debts using a home equity loan. A good debt relief company will enable you to lower your interest rate while also lowering the balance on your debt. This will mean that you can use your home equity loan to pay off your debts with money to spare. Using a debt relief company will also force your creditors to stop harassing you.

Use The Rest Of Your Equity Loan As Savings

The rest of your home equity loan can then be used to establish a savings account. If you have a job, you can dedicate most of your income to paying back your home equity loan. It could be the perfect scenario that will allow you to wipe out your debt while not risking the loss of your home. Your credit score should start to go up when your credit report shows that your debts are paid off.

Anyone can get rid of debt using a debt relief service. For a home owner, using a home equity loan combined with a debt relief program can be the best of both worlds. Using this method can prove to be a creative solution to a really sticky situation. You won’t have to ruin your credit score, you pay off your debts for less than you owe and you can start a savings account with the money that is left over. Why would not want to consider this option for finally paying off your debts.