While your debt may not actually be rising once you stop making purchases with a credit card in Florida, it may take years to pay off the balance if you only make the minimum payment. If you are looking at solutions for getting out from under overwhelming credit card debt, you may have considered a debt settlement company. At the Law Offices of George Castrataro, P.C., we are able to provide answers to questions people often have when considering this option.
According to the Federal Trade Commission, many credit card companies will consider making a settlement for less than the full balance if the customer makes a lump sum payment for a portion of the amount. Debt settlement companies will approach your credit card company on your behalf. They are not affiliated with the credit card company, though, and they cannot guarantee that your debts will be settled for less than the full amount.
During the negotiation process, you are typically required to make payments into a savings account, which will eventually be used to make the settlement payment. If you are unable to pay both the minimum payment on your card and the amount the program requires you to save, the company may recommend that you stop paying on your debt. However, these programs do not offer protection from wage garnishments, late fees and debt collectors.
Attempting to negotiate with credit card companies is not always an effective way to get a handle on your debt. It could be that another option may be more feasible for your situation. The information provided in this blog post is for educational purposes only and should not be considered legal advice.