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Typical Credit Card Debt Settlement Mistakes Made by Novices

If you are among one of the many people losing sleep because whatever you have tried to get your debt under control has failed then debt settlement may be a viable option. However, many people doing it on their own tend to make mistakes that erode their success. Some typical mistakes that novices tend to make:

Threatening to File for Bankruptcy

It is commonly assumed that you go into a debt settlement negotiation having the upper hand simply by threatening to file for bankruptcy unless the debts are reduced substantially. While it is true that credit card companies will normally get nothing if you are declared bankrupt, it is also not very easy for be eligible for a Chapter 7 bankruptcy that will discharge all your debt. Sure, you can exert pressure on the card companies but you need to be really careful in how you do this.

Pushing for Settlement Too Soon

It is quite natural you would want to start negotiating with the card issuers at the earliest and get it over with. However, most card companies will not even consider settlement unless the account is delinquent for at least 4-6 months. The more patience you display, the more advantage you will have when you indicate to the card issuer that you really can’t make the payments unless they settle. Unless the card company is desperate to recover their money, negotiating for settlement will not work. Read debt settlement reviews online to find out how long you should wait it out.

Trying to Get Better Terms Due to Special Reasons

The credit card companies have heard so many sob stories that all of them have set in place policies and procedures that must be followed for debt settlement. As sympathetic they might actually be to the reasons why you defaulted in your monthly payments, such as a bereavement, divorce, sudden loss of employment, a natural disaster, etc., they will not be able to step outside the boundaries of their policies to extend any special assistance to you. Of course, you need to be very persuasive in depicting your financial distress but you can rule out any special advantage.

Shooting Off “Cease and Desist” Intimations

When you are trying to persuade the card company to settle, the last thing you want to do is to prevent them from communicating with you. It may happen that on receipt of a “Cease and Desist” letter, the card company will start litigation against you and not bother to have a conversation that permits settlement.


When you are negotiating for debt settlement, you are liable to get the best terms only when you are able to convince them that your financial hardship is for real and settlement benefits both the parties. You must convince them you are willing to pay but don’t have adequate money. When dealing with a number of card companies, remain flexible instead of insisting that all of them have to settle identically. As long as the average settlement is to your satisfaction, you are home and dry.