The Truth of Credit

Finally, everyone is starting to realize that this recession is going to take some time to recover from but there is a unique benefit to you person in “deep” debt.  According to the Account Receivable industry the cost of buying debt has dropped from 10% to 50%. This is a basic supply and demand situation, there are just more debtors than there used to be. So how does this help you?

Some collection agencies buy debt for pennies on the dollar, in the range of 5 to 10 cents for older debts. With that said their profit margin is greatly increased if they can get any money out of you. Obviously, the high the percentage to the full balance the better it is for them. You have to remember that depressing number of accounts don’t pay.  This creates a great bargaining chip for the person who has access to cash and can settle debt quickly.

Example:

There are now creditors that will extend settlements offers for  an obscene number of months. A deal might look something like this:  With a $3,000 debt you can settle for $2,000, if you can put $500 down upfront and then make payments of $100 for the next 15 months.

The TRUTH is in the end you are the one who has a advantage in negotiating debts. Trust me the bank does not want the legal expense and are happy to recover even 30% of the balance once charged off. This environment is a dealmaker’s paradise. Even if you have to sacrifice for a year the money you will save is exponentional and can really put a fast forward on your way debt freedom?

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