Even though I didn’t grow up with the rich parents I often asked the Lord and Santa for my mom hustled hard to make sure all of our bills were paid.
I can remember going without some things, but I don’t have any recollection of bill collectors hounding our home line with, “You better give us our money” courtesy calls. It was quickly instilled in me that there are certain things in life that you can get away with – living with bad credit never being one of them. I myself am as great an expert in finance as I am in Mandarin, but I know it’s best to pay what you owe especially if you plan to borrow in the future.
It’s a belief many of us share, though a growing number have found it difficult to carry out in practice in lieu of high unemployment rates and lack of opportunity. With President Obama predicting that the unemployment rate will hit 10% this year many have had to turn to their credit cards to make ends meet. However, when it’s time to pay up borrowers find themselves unable to pay what they owe.
That has led to credit card default rates rising to record highs.
Although many borrowers find themselves in financial ruin to the point where they have abandoned efforts to pay back any of their debt there may be hope for those who want to stop playing hide and seek with their credit card companies.
As credit card companies tackle unprecedented numbers of customers in trouble, many are turning to a solution typically frowned upon: settling debts for substantially less than the amount owed.
Not all companies have owned up to it, but creditors like American Express and Bank of America are admitting that they have started offering borrowers the chance to pay only a fraction of their debt owed on a case-by-case basis.
This is rooted in their belief that recouping some of the money is better than receiving none at all.
Approved customers have been informed that only have to pay anywhere between 20% to 50% of their total debt.
While this will still leave your credit score matching the price of a pair of genetic double AA batteries for several years, for those who want to spare themselves years of hounding from collection agencies this is an opportunity too good to pass up.
For job seekers, it’s smart to try and clear your financial problems as quickly as possible given some companies do credit checks before choosing to hire applicants. Bad credit can and will nix chances of netting a good job.
These days credit card companies will file suits against borrowers who owe as little as a $1,000. If your credit score makes you sob at night but you have a little cash on you to spare, maybe it’s time you stop pretending you went to Iraq or ran away from home (seriously, these are things I’ve heard people say they tell bill collectors) and try to make a deal.
Email me at therecessiondiaries@gmail.com.
Michael Arceneaux hails from Houston, lives in Harlem and praises Beyoncé’s name wherever he goes. Follow him on Twitter.