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Settlement of Credit Card Disputes |
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by: Debbie Dragon
When you file a dispute or claim against your credit card company, it gives you opportunity to obtain a settlement. Typically, settlements are a cancellation of some or all of the debt on the disputed purchase in exchange for your agreement to drop the claims. There are other types of settlement for credit card disputes, however, and some may benefit you more than simply canceling some or all of the debt in question. Here are some other possible types of credit card dispute settlements:
Creditor agrees to cancel a delinquency: it can be helpful if the creditor agrees to treat a late debt as a current balance, even if they will not change the total amount you owe. This will help protect you temporarily from debt collection actions.
Creditor restructures payments: whether or not the balance owed is reduced, a creditor may sometimes agree to restructure the payment agreement. Having a lower monthly payment for a period of time may make it easier for you to get back on your feet financially. There should not be added fees when a creditor restructures your debt.
Creditor reduces your interest rate: sometimes a dispute will be settled by the creditor reducing your interest rate for your future payments. It's easier for a creditor to reduce the interest rate on your future payments than it is to reduce the balance owed on a debt.
Return of property: if a creditor has seized property improperly and hasn't resold it, you should request that the property gets returned to you. If it's already been resold or it was damaged while in the care of the creditor, you should get a replacement item, the cost to replace it, or cost of repairs.
Corrected credit report: as part of a settlement, you can request that the creditor delete information from your credit file, correct it or change the information if it is incorrect. They should report the debt as current or fully paid, depending on the circumstances of the situation.
No matter what type of settlement you and the credit card company agree to, make sure you get the settlement details in writing. You may also want to have a lawyer review the documentation and details of the settlement to help you determine if the terms are fair and reasonable, but it would depend on the amount of money involved as to whether or not it's worth the cost of hiring a lawyer to review the settlement for you. Sometimes even advice from an outside party, a friend or a relative, can be helpful.
Do not agree to any settlement that you do not fully understand the terms of the agreement. Also, require that you have the written details of the settlement in front of you before you agree to them, just in case there are details left out of the verbal explanation – this is particularly important if the settlement is the result of a creditor trying to cheat you out of money because it's likely that they'll use the settlement to try and do it again.
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Credit Card Articles > Working with Banks > Settlement of Credit Card Disputes
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