How to Settle Credit Card Debt

Settlement or legally not making any sort of payment on your disputed account is what we are trying to help you accomplish. In many cases, you can get your creditor to agree to a settlement with you for a fraction of the alleged amount that you owe. Getting to this point is not extremely difficult, but does require some knowledge in regards to how to settle credit card debt and the  importance of a well written debt validation letter. This knowledge is supplied in full in the eBook that is available to you on this site.

The first thing to be aware of is that debt settlement or a course on how to settle credit card debt does not always give you the financial freedom you desire. Granted, it can be a lot better than the situation that you are currently in, but it is usually not the best possible outcome. Let me share with you why. Settling a credit card debt can often result in what is referred to as 1099 imputed income tax. This means that the IRS will tax you for the amount that you did not pay to your creditor.

For example, let’s say that your credit card debt is $100,000. You have been fighting the debt for a while and your creditor finally offers you a settlement for 25% of the debt you currently owe. At first glance, $25,000 sounds a lot better than $100,000 and I am not going to say that it isn’t a lot better! However, because of the 1099 imputed income tax, you will then owe the Federal Government taxes on the $75,000 you did not pay. I am sure you can see that this can be quite a significant amount.

Another thing you must understand if you are trying to get your creditor to agree to a settlement is that for your creditor to agree to settle, they must see your account as uncollectable. Sending well timed and well drafted debt validation letters can show your bank that you are not going to be pushed around. This will make you significantly less desirable in their eyes in regards to your supposed debt.

Banks and creditors only want to make as much money from you as possible. That is why continuing to pay on their terms without forcing them to validate your debt can be a huge mistake. In my free mini course you can learn a lot more about what your rights are as a debtor when dealing with your creditor. This knowledge, along with the use of debt validation letters, can save you hundreds and even thousands of dollars throughout the collection process.

You may be wondering what a reasonable settlement amount is to negotiate for with your creditor. This depends on a few different factors. However, the settlement amount you should be targeting is probably much lower than you are thinking. With the knowledge gained from reading my eBook, you can easily set yourself up for a settlement in the 5% – 20% range. A settlement of this amount is absolutely reasonable. These types of settlements happen often when a creditor has been cutting corners and the debtor forces them to validate by using debt validation letters.

After all that being said about debt settlement and how to settle credit card debt, if you follow the right steps you can, in most cases, be free of your debt even without settlement. That is right, no settlement! What I am trying to teach people all around the country is how to avoid unreasonable collections and debt settlement altogether. By following the steps I will provide for you, this will become a reality in less time than you think!

The best place to start learning about this process is my free 10-day mini course. By singing up you will receive a brief yet comprehensive email each day on a different topic of the debt collection and validation process. These mini course lessons will provide you a wonderful foundation for understanding the collection and debt validation process!