Given the current economic situation, is it any easier to settle credit card debt?

Question

I'm getting ready to start negotiating with my creditors for the first time (yes I know it will hurt my credit). Will it be any easier to settle for less given the current economic situation? Thanks :)

Answer 1

Yes it is. Slightly.

It's a case of supply and demand.

You may not know it, but debts such as yours are packaged and sold in batches to debt collectors. Because the economy is down, there is a lot more credit card debt out there. So supply is up.

After several recent years in which lots of new debt collectors entered the market, bidding prices up, the market for debt buying has dropped recently.

Supply up. Demand down. That means the large-scale economic forces are tilted in your favor, because debt is cheaper, and therefore it's easier for you to settle for less.

So, yes, because credit card debt is cheaper to buy right now, collectors don't have to squeeze you as hard to make a profit, so the negotiation landscape slightly favors you more now.

BUT

Individual situations are different. Your debt may have been sold to a collection company that won't negotiate because they overpaid or their policies forbid it or you just run into a hardheaded collector.

Rather than worry about the national economy, learn about YOUR rights. See 11 tips for dealing with debt collectors: http://www.creditcards.com/credit-card-n...

Answer 2

That's a good question!  I wish I knew the exact answer- for myself as well.  I think the best thing to do is to talk to a financial consultant for the best answer.  http://www.jacksfinancialconsultantlist....

Answer 3

The general economic situation will not really affect you as your personal economics is what really matters.

Just contact your creditors and negotiate a 'pay for delete' in writing only and get on a payment plan if you can't pay in full.

Now back to the general economic situation. If your credit is less than sterling well then yes you'll have to sing for your supper. More downpayment, higher credit score requirements and less credit extended.