How to Resolve Credit Card Debt With a Lower Payoff

Resolving credit card debt with a lower payoff involves negotiating a debt settlement with your creditors. This credit solution may be necessary if you don't have money to pay your full balance. You can erase the debt sooner and remove the financial obligation. However, not all creditors are open to this arrangement.

Instructions

1

Talk with creditors before they charge off the account. Negotiating a debt settlement to get a lower payoff becomes much more difficult once a creditor charges off the debt. Act quickly and discuss a lower payoff before your account is six months past due.

2

Look at your budget and determine what you can afford to pay. If you owe $6,000 on your credit card, can your afford to resolve the debt for 50 percent of the balance, or $3,000. Your creditor may agree or counter with a higher payoff amount.

3

Prove that you can't repay the full debt. Before accepting your proposal for a debt settlement, your creditor will review your income and expenses. Creditors may reject your request if they feel that you're able to repay the bill.

4

Keep up with your settlement payments. Creditors will likely establish an installment plan to quickly pay off the credit card once they agree to a settlement. Make timely payments, and don't agree to a monthly payment if you can't realistically afford it.