How to Use Common Law to Settle Credit Card Debt

Contracts that you sign with credit card companies and collection agencies are considered binding agreements under common law. The contracts that you initially signed when taking on debts are fully renegotiable at any time. You may even renegotiate your debts if a judgment has been obtained against you in civil court. Debts are contracts that fall under the category of common law, although they are subject to some regulations from the Federal Trade Commission (FTC).

Instructions

1

Review your current agreements with your creditors. Make copies of all correspondence for your records. Although verbal contracts consisting of an offer, an acceptance and some exchange of value (money or some other property) are considered legally binding, it is very hard to prove their validity in court without some kind of recording. Ask for any agreements that you make with your creditors be in writing. Debt agreements are considered common law in the U.S. legal system, which means that they can be freely renegotiated at any time.

2

Contact your creditors if you have a late or delinquent account with them. Offer to settle the debt for less than the full amount. Keep as much communication as possible in writing to create a paper trail. Start by offering 20% of the total amount you owe on the debt. It will be easier to negotiate with a creditor if the debt is about to be sold to collection or is already in collection. If you demonstrate that you have a paper contract authorizing the debt settlement, it's considered valid under common law.

3

Send payment to settle the debt once you receive a written agreement in the mail. If you fail to provide payment as per your written agreement, it may be used as evidence against you if you are sued for debt collection. These written agreements are legally binding contracts under common law even if they aren't drafted by lawyers.

4

Settle your debts in a similar fashion if you are summoned to court for a debt collection lawsuit. Show up to all court dates to avoid a default judgment against you. Negotiate a written debt settlement with the lawyer representing your creditor when you arrive at the courthouse. You may negotiate a settlement even if your creditor obtains a judgment against you.