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Through the years, consumers who were experiencing financial difficulty could contact credit card companies directly.
Once consumers got to the credit/collections department, income & expense data were reviewed, and a workout program was implemented. Interest rates and payments were reduced, late charges and over the limit fees were waived in this specific payoff program. Of course, the credit card companies closed the account. Very understandable. The credit card companies were willing to work with you if hardship was proven.
Some of those same credit card companies have taken on the approach of helping consumers in an even more beneficial way. That is, if you call in before your account is delinquent. If your account is delinquent, there will be a whole other set of issues to resolve. If you are current, yet facing financial hardship, all you have to do is call and say you are having financial hardship, they in turn will ask what type of hardship. A six month or twelve month program is immediately implemented once you define your hardship. The account is frozen during the new program.
Unfortunately, other credit card companies have taken a position of turning you over to a Consumer Credit Counseling Service (CCCS). In fact three consumers told me that as they said the words “financial hardship” the credit company said that the consumer needed to speak with a CCCS. The consumers were immediately placed on hold and the call was directly transferred to a CCCS. The CCCS then takes information about all consumer debt, runs a computerized program and tells you how much you can save in monthly payments through them. All three consumers needed a savings of almost a thousand dollars a month. The CCCS, who already has approval from credit card companies for rates and terms, was able to save the consumers a little money per month. Not nearly the reduction amount the consumers needed. Each consumer was then told by CCCS they should file bankruptcy.
These consumers who did not want to file bankruptcy felt at the end of options. They were emotionally devastated. They want to pay their debts but without some leniency and grace that could not be possible. What is the next step? Is bankruptcy the only answer?
Before I address that subject, allow me to say that through investigation I have found that the credit card companies/banks are donating sponsors of the non-profit CCCS companies. The credit card companies have already worked out provisions with the CCCS companies of what they will offer for a CCCS program. No exceptions! The CCCS companies have that information in their computer systems and will provide you an answer of a workout program within a few moments of consumers providing all their debt information. The terms are generally coming in at 9.99% and a five-year amortization. The consumers I spoke with need an interest rate of 3.9% or so and a ten-year amortization to make their Spending Plan to work appropriately. I recognize that credit card companies have the consumers’ written promise to pay on file. It must be assumed that the credit card companies that participate in this program have taken the position that either you pay according to their standards or go bankrupt. Have credit card companies taken the position that many consumers will not qualify for bankruptcy?
It is very disheartening to think that some credit card companies have taken that approach. Just when consumers need leniency and grace, the credit card companies take a “no compromise” stance. Many consumers have encountered financial hardship, but still desire to repay all their debts and not file bankruptcy.
What is a consumer to do if they still want to negotiate? Some attorneys will negotiate for consumers. At this point in time, they still have negotiating tactics with credit card companies. Be certain to check the credibility of the attorney or attorney firm. I think it would be a reasonable fee for the attorney to charge $500 per card negotiated. Perhaps some will charge more. Others may charge less. Ask that they refund fees if they are not successful. Arrange that before they begin working for you.
For those of us that have experienced financial hardship yet know that it is our responsibility to pay all of our debts, there is still hope. Try the attorney approach. There are many fresh, hungry attorneys who just passed the bar and are looking for clients. Sometimes young and fresh talent is a good approach.
This is a solid alternative to just giving up and going to see a bankruptcy attorney. Try once more before you throw in the towel. There is still hope.
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