In the event that you have made the decision to rid yourself of personal debt, congrats! You're on your way to getting debt free, and if you want to become fiscally self-sufficient you must free yourself of that nasty credit card debt. You will find options available to consumers that have been in personal credit card debt, from those that are considering filing bankruptcy to those that are just 30 days late. The substantial interest charges, past due fees and penalties can increase your balance significantly and it's going to take some proactive measures in order to get rid of this debt.

The strategy that we're going to discuss here is debt negotiation and if executed properly you can rid yourself as much as 75% of your balances and possibly avoid the need to file chapter 13.

What is Debt Negotiation?

The majority of financial institutions that own credit card companies are for-profit organizations whose primary goal is to generate earnings for their investors and the company.

If you own credit cards from a financial institution and you become unemployed or your financial predicament takes a turn for the worse the bank shifts their priority from trying to generate as much profits from the interest rate to getting as much of the balance back on that particular card. They want that balance back (or as much of the balance that they'll get) since the very last thing they want to do is charge off the dollar amount, which will reflect on their income statement, which usually doesn't look good to their constituents and the share holders of that bank.

Let's say you decide to file for bankruptcy, wiping out the entire credit card balance, simply because that the det is unsecured, and there is no guarantee backing up the balance there and the bank has no recourse but to charge off the entire dollar amount. That's usually the worst case scenario for the financial institution.

If you're 3 months past due on a charge card it might be in your best interest to call the credit card company and explain your situation. Offer them 25% of the charge card balance over the next several months in exchange for the lenders agreement in freezing their interest costs and closing the account.

This process will take time and will take a long time, and maybe weeks on the telephone. The very best plan of action is start with the credit cards with the highest rate of interest, and work down from there. When you speak to the credit card agent be sure you tell them that you are on the edge of declaring personal bankruptcy but you're doing what you can to completely keep clear of this. The direr you actually make your financial situation appear the more likely that the credit card organization will play ball with you and arrived at some kind of agreement to settle the debt.

Costs Associated with Debt Settlement

The costs associated with credit card debt settlement can be significant but more often than not they won't be monetary but will come in the form of disparaging marks on your credit report. This may be a lateral move if you're currently behind on your payments because doing so won't do any extra credit rating damage. You may still find individuals and banking institutions that are willing to loan you money with overdue accounts but the interest rates most likely are not the best.

Debt settlement can be a prospective "win win" scenario, due to the fact that the consumer benefits because they rid themselves of debt while they concurrently steer clear of personal bankruptcy court and the credit card company wins being that they are able to recuperate a portion of the balance.

Getting in touch with a Credit Counselor

If you are feeling leery about proceeding about this by yourself, you might benefit from contacting a professional credit counselor. A credit counselor will analyze your debt, income and expenses which will give you a snapshot about what you did wrong and how to avoid this kind of circumstance later in life. A credit counselor can also be skilled at the art of negotiating with creditors. They can assist you in the negotiation process, as well as putting you in a debt settlement plan which will act as an instrument in the negotiation process.