I’m several months behind on several credit cards. Now have money to pay them off through a loan I got on my house. Can I negotiate a lower payoff with the credit card companies?
Technically, yes, but watch out.
Your creditors are going to play you and lie to you. They are experts and get to call the shots. Your a novice, emotionally tied to the negotiations and you don’t have a clue what they will and won’t take.
What you are talking about here is a lump sum debt settlement, the best kind. With cash in hand a deal can be struck and payment sent before the offer expires. The only big issue you have to watch for is the fact that forgiven debt is going to be treated by the IRS like income. You’ll have to pay your normal tax rate of that so be sure to set aside enough of your funds to pay that tax bill.
When it comes to negotiating with creditors, leave it to the pros. A debt settlement company is going to charge you a fee for doing this but they can also save you a lot in the long run. Besides, a good debt settlement company will know the proper way to get this all documented and paid so when the creditor comes back latter and says they never agreed to the deal, you’ll have the right proof they did.