I am concerned about negotiating a credit card settlement as I do not want to ruin my credit!
At least once a week, I hear this statement from a business owner who has used his personal credit card to finance the business. If you are maxed out on your credit card limit and you are making the minimum monthly payment more than likely your credit score has already been affected in a negative fashion. The credit card companies look at several factors when compiling your credit score which includes bill paying history, current financial condition(how much money are you making, your asset base etc.), and how much money you currently owe.
As a result when a business owner has maxed out his credit cards is only paying the minimum balance and has been late several times on his monthly payment his/her credit score is more than likely low. If you find yourself in this situation making a settlement offer may in the long run help to improve your credit. Of course, you will have a blemished payment record but once you have paid off the reduced balance you will have less money owed, which will improve your overall credit rating over the long term. In addition, would you rather have money available to pay for goods and services or a perfect credit score?
The bottom line is when you are having cash flow problems it is important to develop a game plan. Which vendors do I need to maintain a good relationship with to assure an uninterrupted flow of goods and services to my business? Can I afford to never do business with my back-up supplier again? Does it really matter if I settled with MasterCard and eliminate a burdensome monthly payment?
Business Advisory Center is an industry leader in professional debt reduction and is an ideal position to help you prioritize which suppliers and creditors you will need to pay and which ones you should try to ask for a reduction. We normally settle between 22% and 50% of the outstanding balance with payment terms of 3-12 months on the reduced balance.