Credit Card Debt Negotiating

Credit card debt negotiating seems to be a hot topic among American consumers because of the high percentage of unsecured loans. Some programs can assist people who have high debt/income ratios and who have lost their jobs or have financial catastrophes, such as medical and/or personal emergencies. Many consumers become insolvent, meaning they have inadequate income to pay all their bills. Credit card debt negotiation is an alternative to debt consolidation and bankruptcy. These companies specialize in compromising over interest rates and/or monthly payments with the lender on behalf of the consumer.

Almost half (48 percent) of Americans hold a significant amount of unsecured loans, therefore awareness of how to deal with this problem has increased drastically over the last decade. Over the last year and a half, a third of these people have done nothing to reduce their debt. Many consumers are only able to pay the minimum payment each month and do nothing to cut back on expenditures. Many of these people will resort to bankruptcy. Consumers should use caution when considering a credit card debt negotiation program. Before enrolling, research the company and become thoroughly familiar with their practices. The consumer pays the credit card debt negotiating company a monthly sum in accordance with the agreed amount. Then the company works to bargain a settlement amount, which can be from one-half to three-quarters of the original amount owed.

Many companies guarantee that by using their credit card debt negotiation program, consumers can avoid bankruptcy and wipe out what they owe much sooner than if continuing on their own. What they don't mention is that instead of paying the creditors directly, the once-monthly payment will go to the company. As a result, the credit card accounts will default and a borrower's credit rating will suffer. To qualify for most programs, a borrower must have a minimum of $5000 in loans. Other criteria include facing bankruptcy or having been denied funding for an automobile or home. Qualified loans include medical bills, department store cards, personal unsecured loans, closed utility bills, and repossessions. There are a number of non-profit companies that specialize in this process. It is important to work with a company that provides financial counseling with an emphasis on remaining debt free once the consumer completes the program. Remember, "The rich rules over the poor, and the borrower is the servant to the lender" (Proverbs 22:7). Becoming debt-free is a healthy goal and credit card debt negotiating can be a viable solution.

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