Let's Make A Deal

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) June 17, 2009 -- As of late, fast food chains, amusement parks, hotels, etc. are claiming bankruptcy while big banks and auto makers are receiving bailouts. Now, consumers are negotiating their own credit card ”bail out” (of sorts) which could be tagged “Let’s Make A Deal”. Unknown to consumers until recent, the credit card deal making process has become a very real option for those with delinquent debt. More credit card companies are increasingly settling delinquent accounts for substantially less than the amount owed.

Many creditors will negotiate a settlement on a case-by-case basis, depending on the amount of debt, length of delinquency and whether or not the cardholders has assets (as the creditors have the right to sue, get a judgment for the amount owed and place a lien on a cardholder’s assets). But as the recession continues, many cardholders have less to lose, and more cardholders are unemployed, meaning there are no wages to garnish. “The creditors would rather have a piece of something now instead of absolutely nothing down the road,” said Adam K. Levin, the founder of the consumer education Web site Credit.com. Experts say 5 cents on the dollar is what card companies hope to get on past-due accounts.

It seems the only people making money on debt are the debt negotiation and settlement companies that are setting up shop at an alarmingly fast rate. Debt negotiation and settlement companies negotiate deals with creditors to settle for a percentage of the balance owed. Usually, these services cost 10-15 percent of the original debt, but may go as high as 20 percent.

While settling delinquent accounts for substantially less is appealing, consumers must be at least six months delinquent for most credit companies to consider a settlement. Consumers should also remember that a delinquency of any sort can destroy a credit record.

credit     credit card debt     debt settlement