Self-representation in Debt Settlement

There’s been quite a few articles recently talking about how credit companies are now starting to accept settlements on delinquent accounts due to the numbers crunch. The NY Times had an article titled “Credit Bailout: Issuers Slashing Card Balances” in which they related one man’s experience where he got a 50% settlement with the company from the account representative over the phone.

Mr. McClelland’s credit card company was calling yet again, wondering when it could expect the next installment on his delinquent account. He proposed paying half of his $5,486 balance and calling the matter even.

It’s a deal, the account representative immediately said, not even bothering to check with a supervisor.

As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed.

This experience of his was with HSBC, a major credit card lender. However it goes on to say that only a few creditors are even admitting to this practice, and most are unwilling to talk about.

This does show just how desperate the credit card companies are getting. Their just using the basic philosophy that the debt settlement companies have said to them for years. It’s better to be guaranteed of getting some of the money, then taking a chance on getting none of it.

So this means that everyone can just handle their own individual cases and that the whole debt settlement business is extraneous , right? As Lee Corso would say, not so fast my friend. Sure, you can attempt to negotiate with the credit card companies yourself, that’s always been your right and thus nothing new. However, the key is whether or not this is in your best interest.

When people are in court; they always have the right to represent themselves and serve as their own attorney, but most realize this is not the best idea for the common man. There’s an old adage that says “a person who represents himself has a fool for a client”. This holds true in regards to debt settlement as well.

The reason that attorneys exist is because they are experts in the field and their expertise is a service that’s available to you. For this service there is of course a fee. Debt settlement companies as well are experts in the field and know how to use their established relationships with creditors to get deals that their clients would not  be able to get by themselves.

Its true the credit card companies are getting desperate, but this desperation opens up negotiations with the settlement companies to improve at a drastic rate as well. I guess we’ll never know, but I wonder if a professional debt settlement company would have been able to get Mr.McClelland an even better deal.