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I Can’t Pay My Credit Cards, What Can I Do?

By Author: Paul J Paquin
Total Articles: 1

If you can't pay your credit cards you can settle the debt for less than the full balance owed, where a portion of the balance can be forgiven and you can also use debt validation to dispute its validity and possibly not have to pay the debt.

Even if you do get served a credit card summons (worst case scenario, that happens in about 2% of cases), you can still legally get the debt settled and paid off, for less than the full balance owed. Keep in mind, before debt validation and debt settlement become a possible solution, your accounts must be delinquent to the point where they get written off and sold to third-party debt collection companies. Credit card companies won’t offer you a very attractive settlement while the accounts are still with the original creditor, but once the accounts are sold to a debt collection company now you can get the killer discounts!

If you can’t afford to pay your credit card payments, talk to an IAPDA Certified Debt Counselor for Free Advice at (866) 376-9846.

How does debt settlement affect your credit score?
If you’re behind on your credit card monthly payments, your credit score has already been negatively affected.

As your debts are settled and paid off one by one on a debt settlement program, you may start to see an improvement in your credit score.

On the other side of the coin; if you’re current on your monthly payments before entering into a debt settlement program, your credit score will continue to drop until your accounts are sent to a debt collection agency. As your debts are then settled and paid off, one by one, you may see an improvement in your credit score.

If you want to increase your credit score while on a debt settlement program you need to have other credit accounts outside of the program that you are paying every month. (i.e., car payment or mortgage payment, and other credit cards)

How debt validation affects your credit score
Debts are not disputed on a debt validation program until they’re sold to a third-party debt collection company. Like with any debt relief program, if your creditors are not getting paid on a monthly basis, your credit score will go down.

Once a debt is proven to be “legally uncollectible” the creditors can no longer report the debt to the credit reporting agencies (legally anyway). When a third-party debt collection account gets removed from a person’s credit report, this action can have a positive effect on credit scores.

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CEO at Golden Financial Services

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