Anyone can apply for an FHA loan. However, not every application gets approved for an FHA loan.
Build a budget and stick to it
So, why would a credit card company accept a lesser amount and agree to forgive the rest of the loan?
It can happen in two scenarios:
- The credit card company is in need of some immediate cash owing to too many defaulters
- You are on the verge of bankruptcy and the credit card company would want to reduce its risk.
In both scenarios, a negotiation would be inevitable. Also, you need to remember that there is no collateral on which these credit card issuers can fall upon. After all, credit cards are nothing but unsecured loans.
How to go about?
In order to finalize your debt settlement, you will have to put in efforts to make your lenders understand that you are really in a bad spot financially. Your lender will have to believe that if he rejects your offer he stands to lose out. There are a few things you need to keep in mind here:
- Your latest financial statements cannot show your money going towards payments for luxuries such as visits to five-star restaurants or purchases of designer clothes. You will not get any sympathy by showing such statements. You will have to stop using your card at least three to six months before you contact your lender.
- It will not work if you have been making your monthly payments regularly. You will only come across as a person who is trying to run away from debts. Instead, you have to show that you have been defaulting or falling behind on your monthly payments.
- When you are ready to get in touch with your credit card company for debt settlement, make sure you get in touch with the concerned person from the settlements department. Explain your situation to them. Tell them that you have managed to scrap some cash so that you can settle their account before you end up using that money for some other purpose. If they don’t fall for it, you can even mention that you are having a few other accounts where you have been trying to pursue debt settlements. Some amount of competition can succeed in putting pressure on your credit card issuer.
- Start by offering to pay about 30% of the balance that is actually due. The issuer might ask you to increase your amount. If it goes beyond 50% it is better to try settling with another creditor or save up that money to make your future monthly payments.
- If you manage to finalize your debt settlement, make sure you get it in writing. Else, the credit card company might take the money and then use a collections agency to recover the remaining balance.
If you find it difficult to get an affirmative answer from your credit card lender, you can always hire a professional debt settlement agency to do this for you. In fact many such agencies buy debt settlement leads,
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