If you have a past due delinquent credit card account that you are considering a debt settlement on, check your credit report to see if your credit card company or lender has already charged off the account as a loss. A “charge off” is considered as bad debt that the company has already counted the debt as a complete loss.
Once your account has been charged off, then your credit score has already been affected in a negative manner and any attempts to bring the account current will likely have minimal effects, if any at all in improving your credit history.
If your account has not yet been charged off, and you have been behind for as much as 90 days, you should take actions quickly as possible to prevent having your debt written off as a complete loss by credit card companies. Either start making minimal payments every month, or contact the credit card company to see if they will consider some sort of credit card debt relief settlement.
A credit card debt settlement will still negatively hurt your credit history but may not be as bad as an account where the credit card company has written off the debt account as a complete loss as a charged off.
If you owe enough money, the credit card company can take legal actions against you. If you owe a few hundred dollars, the credit card company will probably deem it a waste of time in pursuing legal actions, but once you have debt over $10,000, they may file suit against you to get back the money that you borrowed. The more common scenario is that credit card companies will sell your debt account to collection agencies who use more aggressive tactics to try to collect the past-due debt.
Some of the strategies these companies will use is to call your employer, family members, friends and other people that they think you know. They will also make threats, which more often than not, are empty threats in an attempt to scare you into paying.
The moral is to not let it get to that point. Either try to make minimal payments or work with the credit card company to settle your debt, either on your own or through a professional debt relief company.