How can I keep my line of credit open and settle my debt for less than the balance?

Question

Hello,

I have had a credit card for nearly three years, and have always paid the balance in full every month. However, a few months ago, I got sick and lost my job, etc. and to make a long story short, I lived off of my credit card and can't afford to pay the balance off in full. My question is, is it possible to keep my line of credit open and somehow settle the debt for less than the balance (i.e., pay $550 to wipe out the $1000 debt)? I want to take my balance down to zero, but there's just no way I can afford to do that right now, but I need to use my card until next semester starts.

Answer 1

Call the credit card company.  If you are willing to make small monthly payments, they might be willing to work with you and allow you to keep the credit line open.  I'd suggest just tearing the d**n thing up, pick up an extra job and move home if that's an option.  Credit card debt is the worst debt possible.  Try www.prosper.com and consolidate your debt, pay off all your credit cards and pay back prosper at what is often a lower interest rate than you could get from a card.

Answer 2

It's unfortunate, but you can't expect to use someone else's money, not pay them back the full amount, and continue to get more of their money.  Work with the creditor, but tighten your belt and pay your debt the best you can.  Forget about that card for a while until it is paid.  Preserve your credit.  It is more important now than ever.

Answer 3

It is credit, you will have to do it over time.  Your credit card is not an insurance tool that can be forgiven.  We all hate paying bills but you can not wipe away your debt.  If it is only $1000 and you are now working it will take a couple of months to pay off but you will.