Like other forms of debt settlement, credit card debt settlement requires you to have either a direct offer from the creditor to settle or the ability to prove ‘demonstratable financial need’ such as an illness or injury which will affect your ability to earn money. Additionally, for all types of settlement, you will need to prove that you have the financial means to settle (proof of means).

Once a settlement agreement is reached and the settlement is paid, the remaining balance is forgiven, and the account is closed as ‘paid’ or ‘satisfied’.

Unlike settling with a collection agency, credit card settlement usually involves a settlement directly with the credit card company, often as a final attempt made before they will sell the consumer debt owed to a third party collector.

Typically, credit card settlements will not discount the amount borrowed but may forgive interest, late payment fees, and other penalties. If the settlement involves a credit counselling agency or other negotiator, the discount is larger.