How can I get Credit Card companies to settle for a lower total payoff than the total that I owe them??

I am looking to pay off a significant amount of debt in the near future but I don't think I will have enough to pay off everything completely. I have heard from other people that they were able to get the credit card companies to settle their debt for thousands less than the total they actually owed. I was wondering how or if there was actually a way to do this.

Public Comments

1. go through one of those credit counseling places....they settle with your company at a fraction of what you owe. You pay a weekly payment (I think, or maybe monthly) and they cut off interest.
2. There are several ingredients required to get something like this done. First of all you have to be pretty substantially behind on your regular payments, say on the order of 5-6 months at least. I wouldn't suggest you go there if you aren't there already, but if you are, on to step two. Secondly, you need to amass as much as you can get together and then begin calling your creditors to work out deals with them. I'd only call them one at a time and offer to settle with them for what you have. They will likely not agree at the outset, but you will have to stay on them and call them again and again. Explain that this is all you have been able to put together and that if they won't take it you will have to work down your list and settle with the ones who will. A real key here is talking to someone with a brain who can make decisions (they're hard to find in most credit card departments). Any deals you work out must be given to you IN WRITING prior to paying them off. The letter of settlement must contain the language "settlement in full" or DO NOT accept the deal. Do not give them account information or post dated checks. You agree, you get it in writing and you fulfill your agreement, anything less is a no go. You'll have to keep at it but after a time, if you get brains on the phone, they'll understand that they will have to accept less if they are to get anything at all. When you speak with them, be respectful and polite no matter what they say to you and just be very matter of fact. If you can avoid it, do not go to a credit counseling service. There are few that are reputable and even those that are will report your payments through them as "paid through agency" to your credit bureaus, which is the same as reporting a chapter 13 payment plan for the purposes of qualifying for mortgages and the like. I hope that helps.
3. People who try to eliminate credit card debt by trying to settle with the CC companies usually do it thru a debt consolidation service. This is a viable way to do it, and often free, but it WILL negatively effect your credit score. I had high debt at one point and I just kept transferring balances to 0% offers and then cancelling the card I had. This is a way to prevent paying interest and see your balance fall much faster. I reccommend the method I used...again consolidation will affect you negatively.
4. Stay away from those debt consolidation places. Most of them are run by scammers. they take your money and never send it to your creditors. from your question, i assume you will soon be coming into a substantial amount of money, through an small inheritance, a work bonus, or selling some property. as the other person suggested, call the creditor direct. do not be disturbed when the first person you talk to says no. that is what they are trained to do. the person who answers the phone at those big places does not have the authority to help you. ask for a supervisor. explain the situation. beg for kindness. my daughter did this when she got a bonus and three of her five credit cards canceled the interest that had accrued going back six months, and they all let her keep the cards. it never hurts to ask. the worst they can do is say no.