How to Negotiate Cash Payoffs for Credit Cards
Your credit card company may readily negotiate a cash payoff for your credit card if you're experiencing financial trouble and contemplating bankruptcy. Called a debt settlement, credit card companies don't negotiate payoffs with everyone. Creditors lose money with settlements. However, since a bankruptcy discharge might eliminate the debt, some creditors are prepared to negotiate a cash payoff to recover a percentage of money owed.
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Instructions
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Prepare your negotiating strategy before calling your credit card company. Check your available cash and determine what you can spend on a cash payoff. Creditors may only accept your settlement if you have accessible cash to pay the debt in one payment.
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Call your credit card company. Ask the person who answers the phone to transfer your call to someone who's authorized to negotiate cash payoffs or debt settlements.
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Convey your plans to settle your credit card balance for less than you owe with a cash payoff. State how much you're willing to pay to satisfy the balance.
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Discuss terms and compromise to reach a settlement agreement. If your credit card company recommends a higher, but affordable payoff amount, accept the offer to satisfy the balance. Do not agree to a settlement that you cannot afford.
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Declare your plans to file bankruptcy if you can't agree to a payoff amount. Creditors may agree to your terms and accept your cash payoff if you're filing bankruptcy.
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Ask for a written statement to confirm the payoff agreement. The creditor can send the confirmation letter by postal mail or fax.
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Tips & Warnings
If negotiating a cash payoff to get rid of a debt, the creditor will update your credit file and report that the account was "settled for less than the balance." Settlements can negatively affect your credit score because you didn't complete your financial obligation to the creditor.
