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How to Negotiate Credit Card Debt Settlement Yourself

Sarah Edwards | June 25, 2024

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: When it comes to credit card debt, it’s easy to get in over your head. But with a little negotiation, you might be able to settle your debt for less than you originally owed. Here are four negotiation tips from an attorney to help you settle debt yourself: contact the opposing attorney for negotiations, don’t make empty threats of bankruptcy, give the creditor reasons to accept your offer, and be prepared for a counteroffer.

When it comes to settling your debt, you’ve probably heard the same advice from just about everyone: “Get a lawyer!” But there’s one major problem with that — when you’re up to your ears in credit card debt, you don’t usually have hundreds or thousands of dollars to hire a lawyer to help you settle it.

Fortunately, your friends at SoloSuit talked to a lawyer so you don’t have to! Check out these tips from consumer rights attorney, John Skiba, on how to negotiate credit card debt settlement yourself.

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Tip 1: Negotiate with the opposing attorney

There are often layers to this process, but it’s important to understand that most of the time, you won’t be dealing directly with a creditor — you’ll be dealing with an attorney who represents that creditor.

For example, you might owe a delinquent medical bill. The doctor’s office then may sell the debt to a collection agency with a lawyer on retainer. If you get a call from an attorney’s office about a debt, you might think that the best course of action is to call the original creditor to clear up the situation. However, the creditor would probably just redirect you to the attorney anyway.

Tip 2: Don’t threaten bankruptcy — unless you really mean it

Some people think that if they threaten to file bankruptcy, a creditor will be eager to accept their settlement offer. However, creditors understand that a certain percentage of customers are going to file for bankruptcy, so chances are good that if you threaten to do so, the creditor won’t negotiate with you — they’ll just tell you to go ahead and file.

Tip 3: Give the creditor reasons to accept your offer

Credit card companies would rather get some of their money back than get nothing at all, so it’s worth pitching a settlement offer. But first, you need to give them a reason to accept your offer. Financial hardship is a great reason, and if you’re judgment-proof — meaning you don’t have the resources to repay the debt even if the court issues a judgment against you — that’s even better.

There are two criteria that make you judgment-proof: having a very low income (or only Social Security income) and having few assets. Tell the creditor if any of these apply to you:

  • You’re on Social Security.
  • You make minimum wage or close to it.
  • You already have a wage garnishment in place.
  • You’re currently dealing with lawsuits from other creditors.
  • You have tax dents or tax liens.
  • You owe back child support or back alimony.

The goal here is to paint a picture of your situation to the creditor. If it looks like they won’t be able to collect on a judgment against you, they’re far more likely to negotiate a credit card debt settlement with you.

Ready to settle your credit card debt? Get started with SoloSettle from SoloSuit today!

Tip 4: Be prepared for a counteroffer (but make sure your offer is reasonable)

Credit card companies want to make as much money as possible. This means that no matter how reasonable your settlement offer is, they’ll always come back with a higher counteroffer.

These counteroffers are always expected, but if you want to actually reach a settlement, you should make sure your offer is reasonable. For example, if you owe $10,000 and offer to settle for $200, virtually no creditor will accept.

So what makes an offer reasonable? Mr. Skiba says it’s less about the dollar amount and more about your situation as a whole. At SoloSuit, we generally suggest starting off settlement negotiations by offering to pay 60% of the debt. However, if you’re judgment-proof or close to it, a creditor might be willing to accept 25% or 30%.

Note that junk debt buyers typically accept settlements of 10% to 40%, especially for quick lump sum payments, whereas original creditors usually expect 50% to 75%, with payment plans costing more in the long run. But it all depends on the details of your case and your financial situation. This is why we suggest 60% as a smart start to debt settlement negotiations.

To learn more about these four tips, check out the attorney interview with John Skiba in the video below:

Make sure you have a debt settlement plan

Before making a credit card debt settlement offer, make sure you have a plan. Here are some tips to work one out:

  • Decide whether you want to settle with a lump sum or payment plan.
  • Determine how much you could realistically pay.
  • Write out your plan so you can reference it while negotiating.

Once you have a plan, you’re ready to start negotiating. If you’re judgment-proof or simply don’t have the resources to pay 60% of your existing debt, you can always offer to pay less. Regardless of where you choose to start negotiations, it will usually take a few rounds to reach an agreement. To see how this works, let’s consider an example.

Example: Jake had $10,000 of credit card debt go to collections. Yesterday, he got a notice that said the debt collector was suing him. Jake doesn’t want to deal with a lawsuit, so he sends an Answer letter and then decides to see if the collector will settle. He reaches out via email and offers to pay 60%, or $6,000. After some communication back and forth, Jake and the collector settle on Jake paying 70%, or $7,000. Jake arranges payment, and the debt collector drops the lawsuit.


Draft and file an Answer to the Summons to buy yourself time to negotiate debt settlement.

Of course, negotiating a settlement with a creditor or a debt collector can often be confusing and overwhelming. That’s where SoloSuit comes in. With SoloSettle from SoloSuit, our software will help you format documents and will interact directly with the creditor or debt collector for you. You can streamline the process and get out of debt for less.

Find your way to a debt-free life

Going head-to-head with your creditors can be scary. However, keep in mind that settling is often in their best interests, too. Lawsuits are long and can be expensive, and many creditors and debt collectors would rather get a portion of what you owe than go through a lawsuit.

Although figuring out how to negotiate credit card debt settlement yourself can be extremely stressful, the time and anxiety are 100% worth it. Take a deep breath, create a plan, and start negotiating! And if you need a little help, don’t forget that SoloSettle is here for you too.

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