Will Credit Card Companies Settle Debt With Someone Who Has Business Assets?

Generally, credit card companies will settle a debt with someone who has business assets -- unless the credit card is a business credit card with the company's assets pledged as collateral. Under that scenario the card company may decide that it has more to gain by seizing some of the business assets than settling the account for less than the full amount owed.

No Guarantees

Settlement offers are not guaranteed, no matter what the circumstances. The card companies are not required by law to accept a settlement, and a decision to grant a settlement offer may be made only after the bank reviews your personal credit to analyze your financial situation. Credit card agreements give banks the right to check your credit, and a settlement offer could be likely if a review shows that you are clearly suffering from serious debt problems.

Unsecured Cards

No collateral is held for unsecured credit cards, except for your signature and promise to pay. It all depends on the structure of your business, but generally a card company has no leverage to consider your business assets if you are defaulting on a personal credit card. For example, if your business is formed as a limited liability company, the bank cannot legally seize the business assets for your personal credit card debt. With that option removed, the bank may not consider refusing a settlement offer based on your business assets. The limited liability company structure separates business and personal finances and debts.

Financial Situation

When making settlement decisions on unsecured credit cards, banks generally consider only your payment history, the current status of your account and information you provide about your financial situation. This means your business assets may never even come into play as you ask for a settlement.

Negotiating a Settlement

You should keep quiet about your business assets when discussing a settlement of your personal credit card. The business assets belong to the business and you are responsible for your personal accounts. The SmartMoney website reports that some banks will settle delinquent, unsecured credit card accounts for 20 to 75 percent of the balance.

Moving On

The important thing is to get the delinquent debt behind you, even if that means accepting less of a discount than you had hoped for. Some credit card companies will file lawsuits to collect delinquent debt, and that is something that you should avoid. A lawsuit could result in additional costs because of attorney fees and even a garnishment of your bank account if you refuse to pay. Sometimes paying the full amount due is a wise move just to put the issue to rest.