Wednesday, January 19, 2011

Credit Card Debt Settlement - A Legal Loophole in the Financial System

How do you feel if you can eliminate 50% of your debts without damaging your credit report and reporting it as a 'payment made in full'? I can imagine your response. You can either laugh in a sarcastic manner, or can be surprised or else can think that it is not going to work and it is another scam you have got caught to a fraudulent company. Well, I will not judge your response. The attitudes display your experience. However, you need to know that there are legitimate options available in the market.

The financial experts consider 'debt settlement program' to be a financial loophole because it helps the debtors to settle their debts for less than they owe without trying bankruptcy. This method safeguards the consumer against public aggression. The consumers are expected to meet two requirements in order to enjoy the benefits of this program. Firstly, the consumers should have more than $10 000 amount of outstanding balance in their accounts. Once this hurdle is passed, you can go to the second stage; that is, you should stop paying your minimum monthly payments and convince the creditor that you are on the verge of bankruptcy. In fact, you can use bankruptcy as a strategy to obtain a big discount. If a consumer files a bankruptcy case, it legally stops all the actions against the creditor. In simple terms, none of the creditors will be able to touch the debtor anymore. The Supreme Court accepts the fact that the debtor is financially disabled. The creditors' perspective is to make profits. Therefore, they do not like to eliminate debts 100% (this is what happens when a debtor files a bankruptcy case). Instead, they can recover at least half of their money through debt settlement programs. That is why they are willing to negotiate.

So why do not take advantage of this excuse? Knowing the advantages, what you should do is to locate a reliable debt settlement company. If you are confident to handle this negotiation session on your own, you can save more.

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