Using Debts In Credit Negotiations

: Chris Lee Law Firm

  Filed under: Credit Negotiations

debtWhen debts become overwhelming it can often feel as though your options have run out. While you might not think credit negotiation is feasible, it is often easier than you might think. In fact, you probably already have the tools needed to successfully lower your debts.

Burden Of Proof

The biggest obstacle most people face in negotiating their debts is proving their financial hardship. In most cases, creditors will want to see proof of your financial hardship before they are willing to agree to help you with your account balance. This may mean that you need to demonstrate lack of income, unemployment, divorce or even medical illness in order to have your debts with a credit card company lowered.

For example, if you have suffered an illness or even have large medical bills from an accident or injury, these bills can be used to demonstrate your financial hardship. Even though your credit card company has no control over these bills, these debts do still count towards your overall debt-to-income ratio. By demonstrating your inability to keep up with payments due to all debts, a creditor may be willing to lower your interest rate, temporarily suspend payments or even settle your debts.

Why? Because a credit card company knows that high debt-to-income ratios can result in a higher risk of default on their account or even risk their debtor filing for bankruptcy. Creditors can minimize their risk of loss by working with their account holders, not against them.

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