Can you really ask to settle your CC debt for a fraction without hurting credit rating?

I heard the ads on the radio. Is this really possible? If "they" can do it, then the individual can do it without paying someone. How would one go about doing this?

Can you really ask to settle your CC debt for a fraction without hurting credit rating?
I just looked in to this because I am in debt also. The things that I found out are the credit card companies will not negotiate with you or anyone else until your account is charged off. That means you haven't made a payment for at least 6 months. By then your credit is ruined. Then the really scary thing is the credit card company can fill out a form with the IRS and the amount that you do not pay them through the debt settlement is considered income and you have to pay income tax on it. I'm still looking for an another alternative.
Reply:Well, you can always ask. :-)





But no, it's not possible to actually do it. If you don't live up to your end of the contract that you signed, and you don't pay the bill in full, then it will absolutely hurt your credit rating.





When you settle your debts for less than you owe, it goes on your credit report as a "charge off". The CC company writes off the rest of what you owe. You will get a 1099-MISC form in January, and you will owe taxes on the amount that was written off, since it is considered income to you.





A charge off is the most damaging thing that can appear on your credit, other than a bankruptcy.
Reply:What they don't tell you in the ads that you probably have to pay a big fee to the company that's claims they'll fix your credit. My guess is that they have some kind of percentage deal with the CC companies.





I would also guess that this won't help fix any damage to your credit rating. Bad information stays there for seven years, no matter what anyone says. I had an issue with a debtor some years ago about the repayment of a college loan. I paid it back, after fighting for years to get the loan forgiven because of some specific circumstances. I knew i wasn't going to win, so I paid it off, in full. But because i was 'delinquent' in paying it back, it 'eft a mark on my credit that stayed there for some years, even when I applied for the first mortgage on my current house. Fortunately, I was able to write a statement to the mortgage company explaining the situation, and it turned out okay. But ti remained there for some time after.





The best thing you can do if you're in this situation: contact the creidt card company directly and explain your situation. Followup every phone call in writing and get the name of the people with whom you speak (you have NO RIGHTS or protections for deals made over the phone. Get everything in writing). See if they'll work out a plan with reduced interest. Then make the payments on time.





The other thing you can do is to go to your bank or credit union and apply for a fixed rate personal loan to pay off the debt. if you have equity in your house, you could go the home equity loan route, but I'd try not to if you can get a signature or uncollateralized loan. The rate will be fixed, do you won't have any revolving interest charges piling up if you just make the minimum payments, Plus, you'll know exactly what your payment will be each month.





One more bit of advice: when you pay off the CC, don't close the account. You can cut the card up so you won't use it (or as one guy I heard suggested, place it in a baggie and freeze it). Your credit report is based on a formula that uses active accounts and the amount owed on them as a basis for your credit score. You want to shoe that account active but paid in full, as it will boost your score in the long run.
Reply:Check out what the FTC has to say about those companies:





http://www.ftc.gov/bcp/conline/pubs/cred...
Reply:No......





But if you're interested I've got a bridge to sell you.