subject: Credit Card Debt Settlement Programs - A Decent Option If You Can't Pay Credit Card Bills [print this page] Credit Card Debt Settlement Programs - A Decent Option If You Can't Pay Credit Card Bills
Credit card debt settlement programs have gained popularity after the new bankruptcy laws were laid down by the Federal government to cure the poor condition of the creditors and the economy as a whole. In an attempt to do so, the new bankruptcy laws made the filing of bankruptcy quite stringent. Because of the difficulty faced in bankruptcy filing, the consumers picked up the option of credit card debt settlement programs. This method is quite legal and there are no reasons to think that if you opt for this method, you will be in legal troubles.
The Federal law made it mandatory for the consumers to have $10,000 or more of unsecured debt in order to use debt settlement. This method is quite decent and simple. Decent in the sense that the method allows the consumers to have an elimination of debt by at least 50% and the remaining amount needs to be paid back to the creditors. Also, the problem of loss of credit score is eliminated by this method. This explains why the method has become popular.
The method requires that the consumers either hire a professional debt settlement company for negotiating with the lenders or the same can be done by the consumers on their own. When the consumers opt for the second option, it is known as do it yourself arbitration. The job here is to first go delinquent and the wait until the creditor sells off the debt to a collection agency. When the creditor sells off the debt, the consumer or the professional negotiator from the firm hired by the consumer will have to visit the creditor and offer a deal of 30-50% of repayment in bulk. This amount is greater than what the creditor can get back with the help of a collection agency.
In order to ensure that the creditor agrees to this new deal, the consumer or the negotiator needs to put forward a threat of imminent bankruptcy. The creditor will then accept the deal and will waive the debt that the consumer has by at least 50%. This is a very decent method of debt elimination and is now widely practiced. Once the deal is complete and the creditor waives a certain percentage of the debt, the consumer needs to repay the remaining amount of the money to the creditor within the specified time frame as per the new agreement.
With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won't have to pay a fee unless your debts actually settle.
