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Finance Finance Eliminating Credit Card Debt - Here Is Why You Cannot Afford to Hire a Debt Settlement Firm
Finance Finance Eliminating Credit Card Debt - Here Is Why You Cannot Afford to Hire a Debt Settlement Firm
| Eliminating Credit Card Debt - Here Is Why You Cannot Afford to Hire a Debt Settlement Firm |
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| Written by Matthew Highlander |
| Saturday, 05 December 2009 11:20 |
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We have all heard the radio advertisements for debt settlement firms promising to eliminate credit card debt. Unfortunately for the people that hire them, these companies do a much better job of selling their services than they do the job of delivering those promised results. Their fees, a minimum $1500-2000 on $10,000 in debt make it difficult for settlements to take place before credit card debts charge off and are sold. Their lump-sum settlement programs are standard. You stop making payments on your credit cards and pay that money into an account they have created for you. They take their fees out of that account then they pay your creditors, when, and if, enough money accrues to strike a settlement. According to the New York Times, creditors will not negotiate reduced balances with consumers who are still making monthly payments and balances on credit cards with missed payments swell with interest and fees. The Wall Street Journal reported that some major creditors, including American Express Co., say they won't even work with debt-settlement companies. Yet, debt settlement firm's fees are all non-refundable. The problem is most banks charge off credit card debt after six months of non-payment. If you cannot save enough money within six months of starting the program, then your credit card debts could charge off, leaving a seven year negative mark on your credit report. With a charge off and subsequent sale to a junk debt buyer there is no more leverage with the original creditor, the credit card bank, to negotiate away a negative credit report listing. Credit card companies sell off their bad debt to junk debt buyers for 10 cents on the dollar. While, some consumers could still be unwittingly paying money into a settlement fund for the original creditor, it is better to demand the return of that money and to fight off the collection efforts of junk debt buyers with consumer protection laws like the Fair Debt Collection Practices Act, according to the Credit Card Debt Survival Guide. That is because the unsettled portion of the debt will simply be sold to another junk debt buyer for further collection. Eliminating credit card debt through debt settlement is best accomplished on a do-it-yourself basis. Consumers must be ready to present a need-based case for a reduced balance settlement, according to the Credit Card Debt Survival Guide. About the Author: Matt Highlander researched the Credit Card Debt Survival Guide for consumers seeking to educate themselves about credit card debt relief. Matt Highlander is a contributing writer. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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