Credit Card Debt Reduction Advice - How to Legally Negotiate Credit Card Debt

Oct. 7, 2010 - PRLog -- If a consumer having large amount of unsecured loan in the form of plastic money is looking for credit card debt reduction advice, he or she has two options under debt relief program. Depending on the financial condition of the debtor, his or her repayment capacity and some other conditions, the debtor can choose from the two options of debt relief. They are loan settlement route and loan consolidation route.

The loan settlement route requires that a consumer must have an overall unsecured debt of $10,000. Anything less than this value, will not be accepted by the creditors. The next requirement is that the unsecured loan of the consumer must be consolidated in one place. In case it is not consolidated, the consumer needs to take steps to consolidate the same and bring it to one place. Therefore in credit card loan, if the unsecured loan is distributed under several credit cards then the consumer should first bring it to one place. When these conditions are fulfilled, the consumer is advised to take the service of a professional debt Settlement Company for negotiations with the creditor on his behalf. This is advised because a professional company has a vast experience, knowledge and knows exactly how to deal with the credit card companies in order to grab a good deal for the consumers.

The professional negotiator from the company hired by the consumer will advise the person to go reprehensible and stop making any payments what so ever. This is a method to show the bad financial condition of the debtor. After the consumer stops paying, the creditor will wait for 3-4 months and then sell off the debt to a collection agency for trifles. The professional negotiator then contacts the creditor and offers a slightly better deal but also threatens the creditor that the consumer will be left with no other option but bankruptcy in case the creditor refuses to agree. The creditor will generally agree because of the fact that the deal means 100% ROI for the collection agency and eliminate at least 50% of the unsecured debt that the consumer has. So it is the first way to legally negotiate plastic money loan under credit card debt reduction advice.

In debt consolidation route the consumer's debt is not really eliminated. The consolidation firm hired by the consumer will first analyze the consumer's financial situation and find out what the consumer can manage to pay. They will analyze both the income and the expenditure pattern of the consumer and come with a repayment plan. The debt consolidator will then take-up the case with the creditor and asks them to negotiate on the interest rate or other charges. The creditors generally accept the offer as if they don't do so they may lose the whole money. So it is the second way to legally negotiate credit card loan under credit card debt reduction advice.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.
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