Will creditors really agree to reduce debts?John Dickinson, DebtX
It is common for people not to realize that many debts can be reduced provided the credit provider in question is handled the right way.
In the case of a debt collection companies many debts they hold can be quite old. In fact, the older the debt the less they typically will pay to acquire it, in some cases these debts are being purchased by debt collection companies for as little as 20 cents in the dollar, sometimes less.
It is true that in many situations the credit provider or debt collection company is as eager as the borrower to resolve the matter, this is especially true for unsecured debts such as credit cards and personal loans. In such cases the credit provider has limited means to recover outstanding funds. Other than commencing recovery or legal action, there is little they can do other than put as much pressure on the borrower as possible. Credit providers know that in many cases they will not be able to recover all that is owed and depending on the borrowers circumstances, they may be willing to accept a lesser figure to settle and close the account.
It is common for people to feel uncomfortable about talking with the credit provider about reducing the amount owed. This is often due to the fact the credit provider may have been pursuing the borrower for some time because the account is in arrears. The interesting thing is the more the account is in arrears, or the credit provider is unable to contact the borrower, the more likely they are to discount a debt.
Credit providers understand the commercial reality of lending money, & that they will not always be able to get it all back.They accept this as a cost of doing business & an acceptable loss. If the situation is right, a credit provider will often agree to accepting less now as a lump sum rather than the possibility of even less or nothing at all later on. It’s all about effective communication with the credit provider and presenting the situation in such a way that their best option is to settle the account rather than continuing to pursue the borrower.
Effective debt negotiation can be time consuming and dealing with credit providers can be a complex procedure. For many people having a professional debt mediation company assisting them makes sense, and may give the best chance of a positive outcome& larger reductions.