When it comes to tackling credit card Companies, the success depends on perfect timing of the negotiations. Let us look at the whole debt settlement process and as to why the timing really matters. The credit card industry has been going through severe hardships as a result of the financial crisis. The borrowers began defaulting on the monthly minimum payments and subsequently, on the outstanding in totality. This resulted in a very tight liquidity position and the net worth of the Companies diminished.
Under these circumstances, once mighty financiers lost their bargaining power and had to depend on the repayments of the existing borrowers for their mere survival. Debt settlement Companies and negotiation services soon filled the gap between the borrower and the financier linking the two parties together. In return, the settlement Companies made their margins. With settlement Companies and debtors aiming to get the maximum discount possible and the creditors trying to attract the drying up money in terms of repayments, a very competitive marketplace has opened up. These socioeconomic developments back the debtor to walk away with only a part settlement of their credit card debts.
By employing the services of a debt negotiation service, a debtor who is already behind on his repayments can obtain a substantial discount on the debt. The settlement Company will start negotiations at the right time-when around 4-6 months of repayments are in arrears. By this time, the creditors are worried by the possible defaulting of the debtor and want to enter into a deal with the debtor. This will result in a higher discount and a flexible repayment plan for the debtor.
On the downside, there is the risk of the creditors filing legal action against the borrower to recover the money. If this happens, the whole settlement process will be reversed and the debtor will have to incur additional expenses on litigation. Most probably, the creditors will be able to obtain a judgment against the debtor leaving him in a desperate state. Therefore, the crucial factor in tackling the credit card Companies is deciding when to strike!
If you master the art of negotiations and start the process at the correct time, you will be able to win a great discount on your debt.