In today's economy there are a multitude of jobs that just don't pay a real good salary to begin with, couple that with the inevitable problems that will crop up, such as car or medical issues, or an unexpected lay-off or termination, and people's budgets that were once tight and barely manageable, revert to unsustainable, and thereby unable to service debt for credit cards. This means, that there are millions of Americans that fall behind on their credit card bills and become delinquent on them, each and every year, to which some of these people are eventually able to right the ship and make good on their credit card bills, whereas many others simply sink under a sea of debt, and have their credit card accounts closed, their credit rating decimated, and still be on the hook for their credit card debt, credit card interest, and credit card penalties.
The thing is, circumstances do change, and financial situations can improve, so that some people that were unable to make credit card payments find later on, that though their monetary circumstances while not robust, have improved to the point to which they can address past due credit card debts. However, for most people, by the time this occurs, their credit card debt has been processed and sold at a discount to a "professional "debt collector so that now the consumer no longer owes their debt to the original issuer of such, but to a debt collector, that specializes in buying consumer debt at a low price, and applying pressure as well as the legal means to collect from debtors the full amount.
A given debt collector will try all sorts of means to collect on the debt, and not just limited to harassing phone calls or letters, they are quite adept at using legal means, such as the courts, to request and get rendered judgments against the debtor, in the hopes of ultimately placing a lien or garnishment upon your wages, or your home, and so forth. Of course, in America, there are two sides to every story, to which every debtor, no matter how bleak the situation appears to be, must avail themselves of fighting back against the debtor by writing, or in court, or essentially by any means necessary, because if you do not do so, your rights will atrophy, and basically the court will rule against you, if you fail to assert your consumer rights.
While debt collectors strongly prefer for you to give in to their demands and/or ignore their court summons, they do respect a debtor that fights back and asserts their rights, so that, in these types of situations, they will look to mediate the debt amount in question with you. Not too surprisingly, the absolute best and cleanest way for a debtor to settle is to do so at a reduced amount of the total debt, with payment for that amount made in full, so that all of the paperwork reflects that the debt is satisfied and closed at that point of time.
However, typically, most people do not have that extra sum of money sitting in their pockets, so that the next best thing to do is to settle your debt at a reduced amount, with a payment plan which is agreed upon by both parties. While the basic terms of that settlement plan are usually quite straightforward, such as a payment of $50/month for 24 months, there is a very important caveat that debtors need to pay attention to which is that the debt collector representative is either a lawyer himself, or has standard boilerplate paperwork drawn up by a lawyer and it is those extra terms and conditions that can create significant havoc in your financial life, so that if you fail to meet your payment terms, this will legally create an avenue for the debt collector to collect the full amount of the debt, with penalties, against you, and thereby also gives the debt collector the legal power to place a lien or garnishment against you.
This essentially means, that when you settle a credit card debt at a discount with a debt collector, you as a debtor want to be very sure that you can fulfill your obligations to this legal contract as agreed upon, or else your situation will be appreciably worst than what it was when you first began the settlement negotiations to begin with.