(Ask a Question) I have serval credits with low balances that I can pay, but I have one that is huge that I cannot afford their min payment. Can I just do debt settlement on this one without going through my whole financial life.
(Response) It can be tempting to want to find a shortcut on the one large account that is having the biggest negative impact on your monthly budget. Finalizing that debt through a settlement agreement is indeed one possible option, though it may not necessarily be the best option.
For starters, reaching a settlement on a large debt that has terms agreeable to both you and your creditor may be more difficult than you might think. Despite the claims of debt settlement companies who are increasingly being shut down due to deceptive trade practices, large credit card issuers rarely agree to settlements of less than 60% of the debt. Even if they do, you must have the funds to pay them upfront in a lump sum cash payment. If you are already having trouble making their minimum monthly payment, then it appears you lack the funds to settle on the account.
Instead, you are probably experiencing the angst of balancing multiple minimum monthly payments on credit cards with other household bills, and doing so on a limited income. While it is easy to blame the larger account for your financial woes, the truth is that they are all a problem.
It is normal to want to keep your finances private, and it takes a leap of faith to discuss those details with a financial counselor. There are a couple advantages to this approach though. First of all, this approach keeps your financial situation private. It is not shared with family, friends, employers or neighbors. Even family members cannot discuss your case with your financial counselor without your permission. Second, financial counselors talk with dozens of debtors every week. They will not judge you. Instead, they will lend their expertise to you so that you can ask good questions and find out how you would like to proceed.
On the surface, your situation appears to suggest that a debt management program may be a reasonable possibility. Your financial counselor could suggest a plan that helps to lower your monthly minimum payments on most or all of your credit card accounts, thereby making all of the payments more affordable.
I cannot say whether this type of plan would be feasible for you without learning more about your financial situation. Please feel free to comment further about your situation so that I can provide more feedback. Alternatively, you may call to speak with a certified financial counselor. You are in control, and you have the option to simply ask a few questions without necessarily going through your whole financial life.
Tags: cards, credit, minimum, multiple, payments, settle
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