If your account is in the delinquency phase and has been sent to a collections agency, you can negotiate away a huge portion of that debt. This is easier to do if you offer a larger lump-sum payment to the creditor.

Once the account has been sent to the collections phase, the goal of the collections company and the credit card company is the same, which is to receive an amount of money for your debt. The longer your account is past due, the better it works in your favor to save money and the more likely the company is willing to negotiate. You’ve became a liability already and proven that you’re a risk for non-payment. It is translated as money in hand, which is in their best interests to accept. A large lump sum payment is better than betting on your current and uncertain ability to pay the debt in the near or far future.

However, it isn’t in your best interest to let your credit cards go into delinquency or into the collections phase to give you leverage in negotiations with a lender. The fact is, you have negotiated down your debt but it will ultimately go on your credit history and may result in a problem later on making it a harder time to gather sources of credit at a reasonable interest rate and terms in future loans or credit. But with that being said, negotiating down your debt will not give you quite as much of  a bad credit rating as taking  bankruptcy, that stays as long as seven years on your credit record.

To sum it all up, there are many different things you should consider before beginning to negotiate down your credit card debt with the lender. Take the time to research before you call the credit card company or collection agency so you’re enlightened on exactly what your negotiation will produce and the negative and positive effects of it. When you make that call, be sure to tell them exactly what your intentions are, and what you will provide in lump sum payment - the squeakier your wheel is the more grease you can expect.

It is unfortunate that a majority of Americans believe bankruptcy is their only way of financial debt relief, which is completely wrong to think that way. There is a newly constructed debt relief program and it allows "debt settlement" or "debt arbitration". This allows consumers to eliminate up to fifty percent of their debt without declaring bankruptcy that destroys credit rating scores.

The way it works is, the debt settlement companies have a joint relationship with the major credit card companies and varied creditors to negotiate debt settlement for the consumers’ indebtedness. In as little as twenty-four to thirty-six months, the consumer with crippling credit card debt will then be debt- free.