I have heard that creditors allow reduced apr and also remove late fees e.t.c , but why? Why do they allow it?

Jameson

[Ms_Lakisha_Jones]

I have heard that creditors allow this as well. Is this because the consumer is willing to pay something? I was thinking that if they deducted their "astronomical" fees, most people would be more than willing to pay a certain debt off.

[Jason]

Hi,

Welcome to the debt consolidation care forum.

It is true that creditors reduce a huge amount of from the total debts in most of the cases. This happens specially if you enroll yourself in debt consolidation programs.

Debt consolidation deals with unsecured loans where the creditor has nothing much to do if the debtor does not repay him back. He can maximum drag the issue to the courtroom with enough proof that the debtor owes the money. That again means a lots of cost and hassles and harassment. Thus in most cases the creditor agrees with the consultant and reduces the debt amount. In debt consolidation the debt reduction amount often goes up to 40% - 60%. The principal amount is reduced and all the late fees and taxes are totally eliminated. This revised amount is then paid by the debtor in easy monthly installments. It becomes much easier for the debtor now to pay the remaining amount to the creditor.

Thanks for being a part of the forum and we would look forward to frequent visits from you. Meet other members in the forum and share your views and insights with them. I take this opportunity to wish you a happy and debt free New Year 2005 on behalf of team debt consolidation care.

Regards,
Jason