subject: Credit Card Settlement Act - Why Credit Card Companies Are Making More Deals [print this page] Credit Card Settlement Act - Why Credit Card Companies Are Making More Deals
The credit card companies are now making more settlement deals than before. This is helping the consumers to get out of their debts and reinstate the lost financial stability. But the question is that, "Why are they making more deals?" There are two clear perspective from which this can be explained. First is the "threat" of bankruptcy and second is the "aid" from federal government. Let us look into both this perspectives individually.
Threat Perspective: The creditors are aware of the fact that because of the recession, thousands of people have lost their jobs and are now facing problems in repaying their dues to the creditors. The situation has become so worse that if the creditors do not voluntarily wipe out the debts by at certain percentage using the method of settlement, the consumers will be facing imminent threat. If that happens, the consumers will get out of their debts but the creditors will lose billions of dollars. This is what the creditors do not want and hence are making more deals than before.
Aid Perspective: The creditors are aware of the fact that once they agree for debt settlement deals, the government will give financial aid in form of stimulus cash and reduction in tax burden. The stimulus cash will take care of the loss of principal amount and the loss of interest earning will be covered by the reduction in taxes.
These are the reasons which can explain why the creditors of unsecured loans are making more settlement deals.
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.
