If a credit card company has started judgment procedures against you should you try to settle?

Answer 1

Absolutely. Neither the credit card company nor its lawyer wants to spend time and money in going to trial, getting a judgment, then trying to collect through garnishment or levy. Most want to simply get a decent amount of money and close the file. Also, many credit card debts include unconscionable amounts of interest and fees. This means the company has enough of a cushion to accept less than the amount owed but still make a profit. Plus, the company will probably take a bad debt tax deduction on the amount between what is owed and the amount you settle for. So even if you settle for, say, $1000 less than what is owed, the company will get a tax deduction of maybe 25%, meaning that it really loses only $750. Many companies have standard percentages they will settle for. For many it is about 70%. But you might have to pay it immediately. Remember, if the complaint has been filed and served on you, be sure to file an answer on time.