Debt Chemotherapy

You have seen the commercials about Debt Settlement, heard the radio ads, and seen it mentioned online. You are starting to get overwhelmed with your credit card debt, and those &^%$’s raised your interest on your biggest card to 29.9%!!! All of a sudden, you look at the finance charge and it is most of the minimum payment.

You will never pay this off in this life time. You are considering talking to someone about debt settlement and you have read some negative comments on forums and online about debt settlement and you just want some answers.

We believe the Credit Card companies really don’t want you to know about Debt Settlement, though they do settle for less than what you owe them. Hell, MasterCard even says on their own website, under the category called Learning Center that it’s an option for people that need help.

It’s buried deep, deep under MasterCard’s Personal Cards/Learning Center/ Debt Know-How/Solving Problems By Paying Off Your Debt/Debt Reduction Settlements.

Credit Card & Debt Reduction Settlements

Depending on your circumstances, your credit counselor may be able to negotiate a debt reduction settlement with your creditors. Under a debt reduction settlement, a creditor agrees to reduce the amount you owe in return for a guarantee that you will pay off the reduced amount at specified terms. This process also is referred to as third-party debt negotiation.

The criteria for qualifying for a debt reduction settlement are the same as for a DMP. The settlement can include credit card and other unsecured debt, but not mortgages, auto loans and other secured debt such as student loans, or legal obligations such as alimony, child support and fines.

Under a debt reduction settlement, the debt is generally resolved within one to three years, with creditors settling for between 20 and 80 percent of the original debt. After you pay the agency fees and settle the debt, you will see an average of 40 percent in savings.

However, watch out for agencies that promise to reduce your debt by 50 to 70 percent. Many of these agencies are not reputable and unlikely to deliver. Currently, the Federal Trade Commission is investigating a number of questionable counseling agencies that make such false promises to consumers (emphasis added).

There you have it, direct from the horses mouth. The credit card companies will accept between 20-80% of the balance. You just have to quit paying them for a few months so they will consider it.

Then, it’s a game to see how low they will go… It’s for consumer credit card debt, and if your businessness has no assets or is out of business, it will work also. It really wont’ work for a buiness that is still operating because they can do nasty things to you and you really don’t want to mediate that debt.

In future posts, we will talk about the not reputable companies that make false promises.

If you are starting to spin into the credit card death spiral, then give me a call during the day to see if Debt Settlement might be an option for you; our mediators are working with over 20,000 clients and manage $400,000 in debt

Till next time,

Christopher Winkler
DebtChemotherapy.com