How to Settle With a Creditor Without Going to Court

Appearing before a judge because your credit card bill got out of control isn't the best option for your financial health. If you deal with creditors outside the judicial system, the outcome usually will be much more satisfactory for both your mental health and your credit record. The sooner you talk to a creditor and reach an agreement, the sooner the problem will be out of reach of the court. Make sure to get documentation of any promises a creditor makes to you.

Instructions

1

Contact the creditor to whom you owe money as soon as you realize there's a chance of the creditor may file a suit against you.

2

Explain that you want to honor your debt.

3

Ask what kind of payment plan the creditor can offer you. Consider the offer, and decide whether you can afford it. If you can't, offer an alternative plan.

4

Request that the creditor remove the negative entry from your credit report. Ask the creditor to fax you a letter stating that it will remove a specific, named debt from your report in return for a payment of a certain amount of money. Ask that a signature of a person employed by the collection agency appear on the fax.

5

Send the payment or payments as requested. Ask for a letter stating that the payment is complete when the debt has been satisfied.