What Is a Negotiated Debt Settlement?
What Is a Negotiated Debt Settlement? If you’re buried by credit card debt, a negotiated debt settlement with your creditor may be worth checking into. Negotiated debt settlement is a general term for discharging debt in a way that appeals to the credit card holder and the card’s issuer. It’s best to negotiate from a position of strength by not having submitted late payments or having missed them, which can cause a credit score to fall. If that happens, cardholders will likely have a harder time getting concessions in a negotiated debt settlement. Instead, they should start talking to their creditor soon after realizing they’re having trouble repaying their debts. -Forbearance There are a few types of negotiated debt settlements, and the simplest one is called forbearance. Banks offer these programs to reduce interest rates, waive late fees and extend repayment terms. Forbearance doesn’t forgive any debt, but offers better terms for repayment. Unemployed cardholders ty...