How to Settle Business Credit Cards
Settling debt on business credit cards is similar to how individuals settle personal credit card debt. If possible, it is always best to deal with the creditor directly instead of using a third party or going through a collection agency. By following a few simple steps, you can settle the debt for your business and begin restoring your credit rating.
What You'll Need:
- Credit card statements
- Business profit and loss statements
- Bankruptcy paperwork (if applicable)
- List of payment arrangements you can agree to
- Contact the creditor. Begin by contacting the creditor first, and attempt to lock in a payment arrangement. If your account has been charged off, you will need to contact the collection agency that purchased your debt.
- Explain your circumstances. Give the creditor reasons why you wish to settle your account or need to create a revised payment plan. Maybe you have gone through a personal hardship, your business closed or you are filing for bankruptcy.
- State your terms. Offer the creditor a settlement amount or payment plan you can afford. Begin negotiations with the lowest amount you can realistically pay, and keep bartering until the creditor accepts an affordable amount.
- Stick to your guns. Creditors will try to inform you that they cannot accept certain amounts. This is a scare tactic that they feel will force you to accept their terms. Do not fold under pressure, and stick to your original settlement terms you know you can pay.
- Provide your own scare tactic. If the creditor refuses to work with your terms and conditions, tell him your only choice is to file for bankruptcy, and instead of paying the debt, you will be following through with your filing process. This will sometimes push the creditor to settle with you on the terms you have initially set.
- Ask for documentation. When you do come to an agreement with the creditor, ask for something in writing. Verbal agreements are not binding when it comes to debt settlements. It is always best to outline everything you have talked about and agreed to in a document.