Article Advise

submitted: Aug 22nd 2008 | by: WilliamBlake | Total views: 3 | Word Count: 405 | |

Being in debt, an already stressful condition to be in, can bring along with it a horde of other unpleasant side effects, like a phone ringing off the hook because of calls from collection agencies and a mailbox exploding with letters of credit card settlement notices. Even though these things can be miserable to experience, there is good news. These events mean that the creditor you are dealing with is showing that he is willing to accept less than the total amount of debt that you owe and is agreeable to allowing you to use a debt solution plan in order to get rid of your credit card debt.

Agree to a Single Part Payment

Some creditors will allow you to make a single part payment, but this must be done within a short amount of time. Creditors want to make as much as possible, so if they think that you may eventually not be able to pay them at all, it would be in their best interests to get as much as possible returned to them, even if it's not the total that you owe. Fortunately, this could work well for you too.

Creditors typically opt for a single part payment only if your account has been delinquent for ninety days or more. If not, and your account has been active recently, they will not be open to this debt solution.

Still, as a debtor who is entering into such credit card debt settlement, you still need to know a few things and mind what you are getting into.

To begin with, remember that not all credit card debt solution plans make your entire balance go away. In some unique cases, the unpaid balance of your credit card debt may be sent to a separate collection agency to handle.

Also, keep in mind that unpaid debt whose amount is six hundred dollars or more is considered by the IRS to be income earned and is thus taxable. This amount appears on the 1099 tax form.

Lastly, be aware that even going with a credit card debt solution will affect your credit badly in some way. Credit reports that show an outstanding balance to be "charged off" are bad news for you. "Settled for a lesser amount," however, is less damaging to your credit since you chose to do something about paying back what you owed.

About the Author

Are you thinking of trying to lower your payments or the balance owing by negotiating credit card debt? Make sure you visit the Debtopedia website to get some helpful tips first.

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