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Five Things You Need to Know Before Settling Your Credit Card Debt

Are you aware that there are five important facts you should know before settling your credit card debt?

Consumers with delinquent accounts often have nightmares of receiving debt collection lawsuits. Many debt stricken consumers exhaust their retirement accounts as well as their savings in order to fight a lawsuit. If you’re planning to fight a lawsuit, you might want to reconsider. You can enroll in a credit card debt settlement program before the debt collectors file a lawsuit against you.

Debt settlement can help to lower the outstanding balance making it affordable to pay off. When you settle your debts you pay less than you actually owe to the creditors. However, before enrolling in a credit card debt settlement program make sure you keep the following points in mind.

Here are a few basic facts that you need to know before enrolling in a debt settlement program:

  • You may not be able to stop debt collectors from filing a lawsuit against you even after working with a debt settlement company. However, a reputable debt settlement company may provide various ways to avoid a credit card lawsuit. In reality, a debt settlement company can’t stop a debt collector from suing a debtor in the court.
  • You may be sued by the collection agency if you’re associated with a scam debt settlement company and the debt collectors do not get the payment on time.

  • The temperament of the debt collectors may vary from person to person. Therefore, the approach for settling the debt should vary in case of different debt collectors. Some of the debt collectors can be more aggressive and immediately file a lawsuit on the unpaid debts. Therefore, when you’re sued by the rogue debt collectors, you need to be more cautious while going for an out of court settlement for your outstanding accounts.

  • You shouldn’t have a laid back attitude when you default on your payment. Make sure you immediately start working on settling your debts if you’re struggling to make payments on it. Therefore, work with a reputable debt settlement company that can help you solve your financial problem without getting involved in legal hassles. If you promptly settle your debts, then it dramatically lowers the chances of receiving a debt collection lawsuit.
  • When you’re undergoing financial hardship, settling your debts can be a beneficial option to save money and eliminate your financial woes.

  • Some of the debt settlement companies commit the grave mistake of sending ‘cease communication’ letters to all of the debt collectors of a new client. Many debt collectors don’t like getting ‘cease communication’ letters. In this regard, they end up filing a lawsuit against the debtors. The attitude of the different debt collectors may greatly vary; it’s not a good idea to blindly issue ‘cease communication’ letters as it can invite a collection lawsuit.

Therefore, you need to keep the above mentioned four points in mind before you settle your delinquent accounts. If you keep these basic facts in mind, then you can smartly avoid legal hassles.

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