Debt Settlement - How to Reduce Your Credit Card Balances by 60% With Debt Settlements
The definition of debt settlement after the recession is very different as compared to the definition of settlement before the recession.
Until the downturn occurred, lenders behaved very differently when dealing with defaulters.
Until the economy was shaken by record number of bankruptcies, credit card issuers were prepared to waive just the penal charges and other penalties imposed on the account.
Issuers were never prepared to offer a waiver on the principal amount.
However, all that has changed.
As on date, it is possible to settle as much as a sixty percent of the total dues owed to the credit card issuer by opting for a settlement.
What are the terms and conditions of such a settlement? For starters, full and final payment of the agreed amount shall result in a complete settlement of the dues.
Once you have honored your commitment to repay forty percent of the original debt owed, credit card issuer would have no authority to demand any extra payment.
Secondly, creditors are prepared to offer installment facility for repayment of the balance amount owed.
However, you will not have the freedom to make the payment as and when you want.
Rather, it will be your legal duty to deposit the money in an escrow account which shall remain under the control of the creditor.
It can also remain under the control of the debt settlement company if the parties agree.
You will have to deposit the money in the account on a regular basis.
The interest earned by the amount and the total amount deposited shall be utilized for repayment when the required amount is accumulated It is important to remember that charges and fees of the debt settlement company shall be paid through the escrow account only.
This may delay the repayment of your credit card debt.
However, there is no denying that employing a reputed and well known debt settlement company is going to increase your chances of getting a high waiver.
Once the debt is settled, your creditor will inform your credit bureau that the transaction has been completed.
While your credit history will take a beating, such a move is definitely better than having a Chapter 7 or Chapter 13 bankruptcy on your credit score.
Until the downturn occurred, lenders behaved very differently when dealing with defaulters.
Until the economy was shaken by record number of bankruptcies, credit card issuers were prepared to waive just the penal charges and other penalties imposed on the account.
Issuers were never prepared to offer a waiver on the principal amount.
However, all that has changed.
As on date, it is possible to settle as much as a sixty percent of the total dues owed to the credit card issuer by opting for a settlement.
What are the terms and conditions of such a settlement? For starters, full and final payment of the agreed amount shall result in a complete settlement of the dues.
Once you have honored your commitment to repay forty percent of the original debt owed, credit card issuer would have no authority to demand any extra payment.
Secondly, creditors are prepared to offer installment facility for repayment of the balance amount owed.
However, you will not have the freedom to make the payment as and when you want.
Rather, it will be your legal duty to deposit the money in an escrow account which shall remain under the control of the creditor.
It can also remain under the control of the debt settlement company if the parties agree.
You will have to deposit the money in the account on a regular basis.
The interest earned by the amount and the total amount deposited shall be utilized for repayment when the required amount is accumulated It is important to remember that charges and fees of the debt settlement company shall be paid through the escrow account only.
This may delay the repayment of your credit card debt.
However, there is no denying that employing a reputed and well known debt settlement company is going to increase your chances of getting a high waiver.
Once the debt is settled, your creditor will inform your credit bureau that the transaction has been completed.
While your credit history will take a beating, such a move is definitely better than having a Chapter 7 or Chapter 13 bankruptcy on your credit score.
Source...