If your credit card debts are piling up and you are having trouble paying them, one option is to contact your credit card company to negotiate a payment plan. Credit card companies may be open to doing so because it is better for them to negotiate to receive some type of payment rather than have the cardholder file bankruptcy.
As a cardholder, there are a few different outcomes you could try to obtain. First, you could negotiate to pay a lump sum that is lower than the total amount you owe. Second, you could negotiate to have the card company lower your interest rate and/or waive late fees (either permanently or temporarily). If you do decide to negotiate, ask the credit card company if either of these outcomes would damage your credit score. It may be possible that the card company won’t report the changes to the credit bureaus, or they may do so and that might affect your credit score. Also, if you negotiate a lump sum that eliminates some debt, you may need to pay taxes on the debt that you erased. It would help to ask the card company if you will owe taxes on the cancelled debt.
Lastly, if you successfully negotiate a new agreement, be sure to obtain a written document outlining the new terms. You want to be sure you have documentation and fully understand the new payment plan.
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