Making a lump sum offer to finalise your debt

If you can get the credit card company / debt collection company to agree, they can change the terms of the credit card contract.
This means that they can waive your credit card debt or, more commonly, accept one final lump sum payment and waive the rest.

You might ask, why would a credit card company / debt collector be willing to accept less than the full amount owing?

There are a few reasons, such as:

  • If the credit card debt has been sold (assigned) to a debt collector, the debt collector will have paid significantly less than the amount owing, for the rights to collect the full debt. This usually means you can offer less and they will be willing to accept;
  • If there is a risk that you will become unable or unwilling to pay, then the credit card provider might have no choice but to use the Court’s processes to compel you to pay. This can be costly and risky for the credit card provider. In these circumstances, the credit card provider / debt collector may want to accept a lump sum now rather than risk losing more money on costly legal proceedings.
  • If you have a potential legal claim against the credit card provider, for example that they breached the responsible lending laws, then the credit card company / debt collector may want to accept a lesser amount to close your account now rather than waste money on a long drawn out legal dispute with you;

Understanding what motivates a credit card company / debt collector is key to understanding how much you can offer to finalise your debt. Using the Credit Card Debt Assistance Tool can take you through some of the relevant questions.

The Credit Card Debt Assistance Tool will help you
make a lump sum offer to finalise your debt

This tool will:

  • Ask you some questions about your credit card debt and your general situation;
  • Explain some important factors that you should be aware of when negotiating with your credit card provider or a debt collector;
  • Ask you how much you’d like to offer;
  • Generate a letter of offer that you can send to your credit card company / debt collector.
  • Send you an email with a link to the letter and some other information to help you take the next step in dealing with your credit card debt.

If you want to speak to a lawyer that specialises in irresponsible lending complaints, you can call 1800 466 477.

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