CREDIT CARD REDUCTION TO EASE DEBT PROBLEM

2007-03-08 10:33:40

( Financial )



Creditors agree to credit card reduction arrangement when the arrangement works in their advantage. Usually they agree to a credit card reduction arrangement since most of those who avail this option are candidates for bankruptcy. They would rather collect a portion of the credit card debt than lose the chance of collecting any at all when the debtor files for bankruptcy. Thus, credit card reduction is actually a discounted settlement on the total amount owed by the debtor.

Credit card companies use a pro active stance in dealing with people with burdening credit card debt problems. They try to identify who is the most likely candidate for bankruptcy among those who have credit card debt problems. Doing this would help them arrange for a credit card reduction agreement to collect at least a portion of the debt before the debtor applies for bankruptcy.

How to Identify Debtors Who Are Candidate for Bankruptcy

Usually, people who are missing their credit card payment for many months are likely to be a candidate for bankruptcy particularly if they have been missing their other financial obligations with other financial institutions. Other ways to identify potential candidate for bankruptcy is to look into the assets of the debtor. Usually debtors who have no assets to protect them like equity in homes are considered as candidate for bankruptcy. Also, those debtors whose future income cannot assure them to pay off their financial obligations are likely to be candidate for bankruptcy.

Creditors usually take the first step in offering a credit card reduction settlement agreement with the debtor. They send debt settlement letters to creditors as an initial step in the process of credit card reduction settlement. Usually the process takes three to nine months. However, it can be expedited from one to three months depending on the agreement reached by the creditor and debtor.

Credit card reduction is an option for debt reduction schemes to help individuals facing debt problems to at least lessen their financial burden. However, using this option must be accompanied by change in lifestyle and spending habits. One should abide by a financial budget to manage their finances and to avoid getting into financial problems in the future.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.