How do I negotiate a new payment arrangement with my credit card company?

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A couple years ago, I had to close my credit card account and worked out a repayment plan with them. Circumstances have changed where I have changed jobs and now am not making as much as I used to. I can’t afford to keep paying the arranged repayment amount yet the credit card company refuses to work with me on it. I have been current with the repayment plan, bringing my balance down almost in half already, and haven’t missed any of the past payments. I called to see if they can make a new arrangement with a lower repayment amount but every rep I spoke to said it was not possible. How do I handle this situation without having to use a debt management company?

  1. Reply
    October 23, 2011 at 11:32 pm

    Please clarify: Was this credit card way past due or even defaulted when it was closed? Was it charged-off as bad debt?

    If they refuse to work with you then there really aren’t a lot of options. One is to enter into a Debt Management Plan. Contact your local Red Cross for a referral to the local Consumer Credit Counseling Services (CCCS). They can negotiate reduced interest and payments. They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to “enrolled in debt management.” This does not damage your credit, but it may make it difficult to obtain new credit while you are enrolled in their program….so don’t use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would might be denied while you’re enrolled in the CCCS debt management program…

  2. Reply
    R J
    October 24, 2011 at 12:06 am

    Write a letter to customer service and state your situation and your proposed solution. A level one rep on the phone will not get it done for you. If you do not work something out, stop paying anything. They may file suit against you, but you will then have an another opportunity to settle it. Your credit will not become any worse than it already is as the clock restarts if you can’t manage the current agreement. RJ

    Btw, I’m assuming your agreement is with the cc company not a collector.

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