In my opinion, even a discount of one half won’t be of any use to help the average Joe get out of debt. A debt of $20,000 will halve to $10,000 and this must be repaid over a span of a year to a year and a half. Sounds OK?
Well, when you consider the high interest rate charged by credit card issuers and when you calculate the interest factor as well, you realize that you will be paying more than $10,000 in the specified time frame. What’s more, the card companies will be very exacting and will not allow even one instance of default in repayment.
The card issuers may very well bypass the card act and may insist that the balance $10,000 will be treated as old debt. In such a case, the interest rate may shoot up to very high levels. This along with the fact that the current interest rate credit card issuers charge is quite high means that the interest factor will have to be weighed as well.
Well, you can easily obtain relief on the interest factor as well if you utilize a debt relief specialist and if you negotiate to this end with your credit card company. You can either insist on an increase in the total repayment term or you can ask for a break in the interest rate. If the credit card issuer refuses, you can always indicate that the basic purpose of the settlement deal is to help you avoid bankruptcy.
You might as well forgo the whole deal and go in for bankruptcy if the card company is going to be difficult. If you file for bankruptcy, the credit card issuer will automatically lose benefits of the stimulus package and will also lose 50% of the debt owed. A reduction in profit has already occurred.
So, as long as it helps the individual repay the debt on time, the credit card issuer will not blink at decreasing the debt even further. The debt settlement deal’s basic purpose is to offer help to the credit card company and the credit card consumer. If you make use of settlement, you certainly can get relief on this point is well.
On the other hand, chances are high that your interest rate would not come down at all if you try repayment of debt in full. In case of bankruptcy, the question of interest rate does not arise but your credit score and credit history will take a huge hit.
If you are one of the millions of Americans who has over $10,000 in unsecured debt, it is time you found out about the debt settlement options available to you. Due to the economic downturn, legions of people are in debt, with creditors having no choice but to work with customers to reach debt settlement terms. To get free debt help click the following link: Free Debt Relief Advice