subject: Credit Card Debt Solutions Why Your Creditors Will Forgive Up to 50% of Your Debt [print this page] Credit Card Debt Solutions Why Your Creditors Will Forgive Up to 50% of Your Debt
The recent economic slump has hit the business as much as the common man. The common man is struggling with his debts where the businesses have been trying to recover from their losses. Such times have seen record increases in the number of filed bankruptcies. Customers who are unable to meet up with their credit card bill payments have filed for bankruptcy which in turn has increased the losses of the credit card companies.
Debt settlement has brought relief to both debtors as well as the creditor. This is a debt relief method in which the creditor as well as the debtor both agree to settle the account for an amount less than the total outstanding balance due to the creditor.
The reason why a creditor agrees to this arrangement is that they get an opportunity to recover some part of the debt amount which would have been lost had the customer filed for bankruptcy. Whereas the debtor gets a chance to get out of debt by only paying a part of the amount that he owes to the credit card company.
Any debtor who has ten thousand dollars or more in unsecured debt is eligible for this debt relief program.
The process involves the debtor to get in touch with the creditor and inform them of his financial difficulties and offer a debt settlement negotiation. Once the creditors agree the debtor will have to give certain amount of money as down payment in exchange of this debt settlement. Generally, this settlement amount can vary between 40 % to 50 % of the total outstanding balance. A good settlement company can get as much as 60 % debt reduction for their customers. A customer must keep in mind that the settlement process will have a negative impact on the credit rating.
For consumers with over $10k in unsecured debt, debt settlement can be a legitimate way to eliminate a significant amount of that. To find a legitimate company it would be wise to visit a free debt relief network. They will provide free help and point consumers in the right direction whether it is debt settlement or another option.
