If you’ve found yourself way far over your head in credit card debt, debt negotiation may seem like a get out of jail free card. Many debt consolidation companies will advise you that the best way to negotiate credit card debt is to not pay, save up a lump sum payment and then offer it to the credit card company when your account is in collections. This path can be extremely dangerous to your credit history.
While it is not as bad as declaring bankruptcy, your credit reports have a section where it lists if you’ve negotiated any past debt and how much was negotiated. This adversely affects your credit score and makes it harder and more expensive to obtain financing in the future.
Make sure you consider all your available options and that you are really not able to pay before you negotiate down your credit debt.
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