Credit card debt does not go away…you must work them out

All of our clients have massive credit card debt. This we all understand. The banks are not lending to anyone, credit is a necessary mechanism used to support the peaks and valleys of cash flow, and bills must be paid.

Frequently credit cards act as the bank, providing the short term loans the banks should be providing but are no longer willing to. Further, there are many businesses which simply would not qualify for a loan, and thus credit cards are their only source of additional funding. Thus so many small business owners have enormous credit card balances with huge interest rates. I have clients with hundreds of thousands of dollars of credit card debt.

Here is the problem, despite the illusion that they are not secured, if unpaid long enough and not dealt with, the credit card companies will eventually go to court and get a judgment against you personally turning them into a secured loan. Worse, they also have the right to sue and recover from anyone using the card even if they have not signed for responsibility. It’s in the microscopic print that no one can read or understand.

The next issue is the workout. It can be done, some very easily others with extreme difficulty. Tougher cards like Advanta or American Express may be negotiated down to 50% at best with extreme effort, others can be more readily dropped to 35% down to 5-10%, although this too takes a significant effort.

Along the way you are harassed unmercifully by relentless collectors constantly disrupting your life making it impossible to ignore them.

The problem is having the adequate cash to pay them off even if they come down to their lowest settlement level.

Some cards will convert the reduced debt to a short payoff period, four months and others will demand immediate payment of the reduced balance as part of the agreement to settle. It is a large issue that requires a strategy and plan to work out successfully as they just do not go away.

The credit card workout companies do provide a valuable service, if you can afford them as they add their 15% of the gross credit card debt to the mix reducing the positive effect of the workout results. Sometimes the funding requirements of the credit card workout companies are too high to be supportable thus with large cedit card debt they are not a viable resource.

Our approach is different and is more user friendly and affordable with better results as the credit card companies tend to do a fair job but not the best job possible.

It is a serious issue for many and the cure is sometimes as rough as the problem, but it must be resolved. Give us a call, see what we have to say about it as we also understand that in most cases if your credit card debt is high and unsupportable, chances are very good that other debt issues are involved and thus a larger workout is required, resolving all the debt issues not just the cards.

You need a total resolution of all your debt issues not just one at a time.  call Norm at 413-584-2581 he will arrange a teleconference for us to discuss a plan to resolve your debt issues effectively and affordably.