Credit Card Debt Negotiation

There are big changes in the bankruptcy law coming in October 2005 according to Attorney Albin Renauer. He suggests if you're thinking of filing for bankruptcy, do it now. It will be much harder to qualify after October 17th. The credit card industry has finally gotten the bankruptcy law "reform" changes they've been lobbying for. Signed into law on April 20, 2005, the new law will take effect on October 17, 2005. It has significant impact on consumer debt and offers fewer protections from collection efforts than the prior law.

America is swimming in debt. Credit card debt, mortgage debt, car loans, variable mortgages, lines of credit, consumer debt, business leveraging, corporate debt, and state and federal debt. It all adds up to the fact that we are living beyond our means. When there is a disruption in our income, that debt which was once a means of living the good life becomes the albatross that threatens the ship. Love it or hate it, we seem to be a society that has to have it.

Debt can be restructured a number of ways but there are some cardinal rules to observe so that you preserve your ability to control the restructuring of your debt.

1. Never wait until the debt has been turned over to a collection agency. By then it is too late to deal with the original issuers of the debt who might have an interest in helping you. They have discounted and sold off your debt when it is turned over to collections. That means they have written off what they would have conceded to you to a third party. The third party's only motivation is to make money off your bad situation. You are now truly dealing with the devil!

2. Before you seek debt relief, develop a personal budget that is viable and a plan which you can handle. Now you are ready to lift the telephone and call for help.

3. Don't be afraid to ask for help. Advising the lender of a looming problem allows them to help you avoid it becoming a major issue. Trying to avoid the lender only puts you on the defensive with nowhere to go.

4. Seek to be transferred as high in the organization as you can. You want to be at a level where the person is allowed to think and has the authority to grant you a concession or revised payment schedule.

5. Be persistent. No is easy to say. You will hear it a lot. Call back and try to get to someone else. Talk to the same person repeatedly until they begin to get to know you and start wanting to help you.

6. Be pleasant. You need to develop a rapport with the other person so they want to help you. Getting mad only seals your fate.

Credit card debt restructuring is basic negotiations. You have a need. You have a solution to offer. The lender also has a need. They have to be convinced to listen to you. You have to convince them of your sincerity and why they should consider your plan. Don't ask for a handout. Ask for approval of a specific plan. A plan that works for you and gives them something they can accept. The two primary commodities are time and money. If you have money, but not enough, explain your situation and offer to pay off the debt at a discount. 30% to 40% is not an unusual discount. If they sell off your debt they will be lucky to get 50 cents on the dollar. If you offer to pay the full amount, but over time, interest free, you will be saving a lot in money and keep you credit rating from being impacted.

The most important aspect of personal credit card debt restructuring is to ask before you get in too deep. And ask before they start chasing you to pay. A good customer's case always sounds better than a plea from a habitual problem customer.