Thursday, February 24, 2011

Struggling with an overwhelming debt load? Are your credit cards killing you?

The money is spent and bills keep coming, many citizens find themselves in this tight spot every day. While one understands their obligations and responsibilities when using the dreaded plastic sometimes one must find a way out. The credit card companies have a right to repayment and they will pursue all legal remedies available to them. This doesn’t change the fact many need help and finding a trusted source can be quite daunting. 
First one needs to take a realistic inventory of exactly where they are financially today and the prospect of getting out from under the current debt.  While the official unemployment rate is reported to have fallen there are millions of families struggling to get by.  When someone has been unemployed or even more common under employed the stress on the family can be tremendous. The choices become difficult when faced with the hardship, stop paying your obligations, which most understand is their responsibility or decide on bankruptcy.

Monday, February 14, 2011

Why is a different company now calling on my accounts?

Once someone has fallen behind on their payments the obligation begins to take on a whole new life. As the old saying goes “one man’s garbage is another man’s treasure”, so too is your past due obligations. There is an entire industry which solely focuses on bad debt and the collection of these amounts due.

First there is what is called the pre-charge off stage.  At this point your debt is still with the original creditor and they will make attempts to collect the debt through various means. This stage is only 90 to 120 days in the life of a past due obligation. After this stage the bad credit card  debt is many times placed with an outside firm to assist in collecting the past due debt.  This 1st placement is what triggers a different company to begin calling and harassing you to pay your past due credit card bill.
This 1st placement can last anywhere from 90 to 120 days depending on the agreement between the companies.  Generally the first placement is not your ideal time to settle an outstanding credit card bill.  The collection firm is generally acting on behalf of the original credit agency and with this they must be able to make a profit which adds cost to the collection process.  A good rule of thumb is approximately 30% of your original credit card balance will be paid to the agency as compensation for their efforts.  This 30% means most likely you will receive offers to settle above 60% and many times as high as 80% of the original balance due.
Now let’ assume the first placement was not successful and they did not collect the past due account. At this point the original creditor can usually take one of two possible avenues to collect your debit. They can place the past due account with another agency or they can sell the bad debit and they are effectively done with the account.  Placing the past due account with a 2nd firm is referred to as the 2nd placement and the compensation numbers change as the debt is now several months old.

Another option for the original creditor is to sell the past due account to a debt buyer. This means the original creditor no longer holds any rights to this account and the agency whish purchased your account now controls how they will proceed. When an past due account is sold to a debt buyer it is generally sold for pennies on the dollar, anywhere from 6 cent to 20 cents depending on the type of debt, the balance due a tape or snap shot of the debtor. The known facts concern the person who owes the outstanding bill and the frequency of contact with this person.
 
This process can then be repeated several times, debt can and is sold several times in attempts to collect on the account. Conversely ones debt can be placed several times as well all depending the decision taken early in the collection process. Each step along the way offers both a collector and the debtor opportunity to settle their accounts many times for pennies on the dollar if ones patience and understands the process.

Friday, February 4, 2011

Settle your past due credit card debt yourself for 50% off the balance owed

A little determination can actually save you thousands on your past due charge cards. The marketplace is only now beginning to show signs of improvement and there are literally millions of people still finding it difficult to pay the bills today.

The fact that the economy has been bad and people are having a hard time trying keeping their houses in order has made headlines in every newspaper across America. What is not as recognized is that the creditors are also having a hard time and like so many things in life where there is discomfort there is also methods to advance which can benefit the informed. The possibility in this case is for the person who understands he’s not alone when it comes to a shortfall in income.  The credit card companies have also been afflicted very hard as well, although  our news media has not been able to tell this fact.

The opportunity for the average citizen is there for those who understands how unsecured debt moves. Your revolving card bill which goes past due takes on a new situation after a comparatively short period of time.  After a month or two your credit card debt moves into a preliminary charge off stage. This phase will serve one of your most effective negotiation probabilities. Given the fact that the lender are also putting up with by the bad debt they understand that to capture whatever limited cash they can they will have to fight for your money.  Recognizing this simple step can mean the difference in 1000s of dollars.

Provided the financial institution is certain that you have little or no cash your debt. The opportunity to recoup any overdue bills within a realistic time frame. The banks also will need to be convinced that their possibility to recover any revenue is now or never. The longer the contract goes delinquent the greater the chance the unsettled debt will become a absolute loss.

This is why the pre-charge off moment holds so much prospect for the individual. In many scenarios the debt collectors for as little as 30% of the original balance owed. The strategy is strike now while they can because tomorrow is clearly unstable and the credit card companies have commitments of their own to please as well. Within the collection industry these pay outs are referred as SIF or Settlement in Full and most credit issuers would rather settle for what they can now before they move on to more combative and more expensive collection methods. 
           
The Key component is to be perseverance and the ability to tell a convincing story, who which talks to your hardship and conveys a narrow opportunity for the company to recover what is now considered loss money.

The preliminary charge off stage is generally around 3 to 4 months past your most recent payment. Over this time you will certainly receive several calls and letters from your creditor all with the same goal, to collect. Stand your ground and wait the offers will come and in many cases the offers will be for 50% of your balance owed or less. Depending on several factors you may receive offers as low as 20% to 30% of the balance owed.

Provided you can find the funds to to fill these offers at this stage you can expect to literally save 1000's of dollars off your original debt.

Once you settled your payments you will also be stunned by just how swiftly you will start obtaining new offers of credit. There are practically thousands of homes across America carrying well over 15,000 in charge card payments it doesn’t take long to see the value of saving 50% or more off your bill. 

Tuesday, February 1, 2011

Do Not Be Fooled, Collectors Are Not Your Friends

A little patience can actually save you thousands on your delinquent credit cards. The economy is only now starting to show signs of recovery and there are literally millions of Americans still struggling to make ends meet.

The fact that the economy has been bad and people are struggling has made headlines in every newspaper across America. Most people will attempt to do the right thing when it comes to the credit card obligations. The collection industry prey's on the vulnerability and the desire to do the right thing. Do not be fooled into thinking the person on the other side of the phone is a friend or truly understands your current position. They do not care,  the collectors are calling for one reason and one reason only, to get you to pay them off or at least commit to paying something.


The collectors will sound smooth and caring until they realize they are not going to pull one over on you. when a collector calls, ask for their complete name, the name of the company or creditor they are calling for and their phone number. Now the fun part, hang up on them, by law they are only allowed to call once per day and if you take these steps and write the information down on a log the next time they call you will be prepared. If they violate the federal law concerning the number of calls you can use this against them when you attempt to settle the account.


Also never divulge personal facts such as issues within your family, employment concerns, drugs or alcohol excreta. The collectors will use this against you anytime they can and they are not above playing on your emotions or pulling a loved one into the fray.