Negotiating with Credit Card Companies- How Can I Be Sure that My Lenders will Make a Deal?

Negotiating with credit card companies goes on constantly. In the 14 years of negotiating bad debts for my clients, I have only had six accounts that either the credit card companies refused to make a deal, or offered a repayment schedule. And I've negotiated over 2,500 accounts.

Why such an incredibly high percentage of settled accounts? Am I that great?! The answer is...no.

Credit Card Companies are like every other "for profit" business. They just want to maximize profits. And by not negotiating with troubled borrowers, they aren't maximizing earnings. Furthermore, by not negotiating with credit card companies, troubled consumers are likewise losing out.

By not agreeing to negotiate with a card holder's past due account, the creditors may have three main options. All 3 choices are not promising:

1. Do nothing at all by walking away from the account and hope sooner or later the consumer pays off the debt.

2. Resell the delinquent account to a debt collector for a much lower value

3. Sue the debtor.

Credit Card Companies Would Be Foolish Not To Settle

For starters, should the creditors do nothing, the probability is small that they will actually get repaid. Considering the fact that debtors are not legally liable to pay for old, defaulted accounts, a lot of people really do not see the point in paying off the account. They reason to themselves "why should I pay it since I am not legally responsible for that credit debt anymore?

Next, if a credit card company sells the account to a debt collector, the creditor will only receive roughly 5-25 pennies on the dollar. Not too attractive., On the other hand, if your creditors settle together with you, the common settlement deal is about 50%. This means that the lender collects typically about fifty cents on the dollar - much more rewarding compared to selling your account to a debt collector and simply receiving 5-25 cents on the dollar, right?

Finally, if a lender sues a consumer that does not own a lot of assets, the judge may have the borrower pay off the past due (unpaid) credit card debt. The courts utilize income and expense rules to find out if the borrower may possibly be eligible for chapter 7 bankruptcy, which is "debt forgiveness" . If the judge permits the borrower to file for chapter 7, then the debt collector will receive absolutely nothing. Furthermore, the credit card company actually incurs a loss because of lawyer expenses, courtroom costs, administrative fees and so on.

The vast majority of credit card companies would prefer to settle than sue. It is very risky to file a lawsuit. Also, even if the creditor wins a ruling from the courts against a debtor, there is no assurance that the credit card company will ever get paid. In the event that this happens, the lender 1s going to be in a worse situation than before - having wasted $1,000's in lawyer, courtroom and admin costs, and still unable to recover from the debtor.

For these factors by them self, negotiating with credit card companies quite frankly makes dollars and sense!