How Do I Ask Credit Card Companies for Debt Cancellation?

You can cancel a debt with a credit card company through a process called debt settlement. This allows you to resolve credit-card debt for less than the full amount owed. The remaining balance will be cancelled by the card company and your account will be permanently closed. Debt settlement is a good option when you are suffering from financial problems. It is considered by some to be a viable alternative to bankruptcy, which is the most extreme method of cancelling debt.

Instructions

1

Review your billing statement or call customer service to find out how far behind you are on your payments. Generally, card companies will consider debt settlement options only after your account has fallen at least three months behind. At six months--and sometimes sooner--the card companies will close your account for nonpayment and turn it over to a collection agency.

2

Call your credit card company once you have fallen three months behind. Explain your financial situation and tell the representative that you would like to discuss a settlement. Negotiate the settlement amount by making a very low initial offer--say 20 percent of the balance. The customer service representative may counter with 90 percent, or inform you that your account isn't currently eligible for settlement. Continue haggling if an agreement seems possible, or politely end the discussion and hang up. The Federal Trade Commission says you should keep trying for a settlement even if you're initially turned down.

3

Write a letter asking for reconsideration if the card company said your account wasn't eligible for a settlement. Or if you weren't able to come to an agreement on terms, use the letter to increase your offer. Follow your letter with a phone call after about two weeks. Stay in touch by telephone or mail until you have an agreement.