Negotiating a Lump Sum Payment of a Credit Card Debt

Negotiating a lump sum payment with your credit card company isn't necessarily difficult, but it can be a lengthy process. It may also be embarrassing to admit that your finances have gotten out of hand, but for the sake of your credit and future, it's important to push past that and address the problem. Before calling your credit card company, or the collection company if it's gotten that far, collect your most recent statements and your bank account information. It's also a good idea to call when you have plenty of time and the house is quiet, to minimize distractions.

Instructions

1

Assess your financial situation before calling your credit card company. See how much you could realistically offer to cover your debt. Lump sum payments are usually made in either one or three installments, so you won't have a ton of time to come up with the money needed. Be realistic. Don't agree to settle $5,000 of debt in one payment of $3,000 if you have $1,200 in the bank and not much money coming in.

2

Call your creditor. Be polite and ask for help. If there are extenuating circumstances that have caused your financial difficulty, feel free to explain them, but don't embellish or make excuses. Ask what percentage of your debt they would be willing to settle for in a lump sum payment. This may vary depending on the size of the debt and whether you made timely payments for a period before falling behind. If one sizable payment might be tough, ask if the company would be willing to allow you to make the lump payment over two or three months. If you aren't getting anywhere on the phone, don't argue. Stay friendly and ask to speak to a supervisor.

3

Follow through with whatever payment arrangements you make. When negotiating your payment, ask if the company will consider removing the bad marks from your credit report once payment is made.

4

Keep track of any paperwork you receive from the credit card company or collections agency, especially the letter they send you when your debt is satisfied. If you want you can send a copy of that letter to the three major credit reporting agencies. Also keep your canceled checks when they arrive in the mail, just in case there should ever be a question about whether or not you paid.