Banks Ease Burden of Credit Card Debt-How to Get Banks to Settle Debts
"Issuers are looking to get something as opposed to nothing," said David Robertson, publisher of the Nilson Report, which monitors the industry.
Most card issuers are unwilling to talk about the practice for fear that they will be swamped with requests from people who do have the funds to pay their bills. But industry executives confirmed that the practice is becoming more common as card issuers face a record percentage of charge-offs, giving up on collecting debts that consumers never repay. The charge-off rate on U.S. cards for July was 10.52 percent of balances, according to Moody's, which expects it to reach at least 12 percent in the middle of next year.
"I think the credit card companies have learned from the mortgage problems the value to them and their customers of trying to work something out where it's appropriate and feasible," said Nessa Feddis, vice president and senior counsel at the American Bankers Association.
http://www.washingtonpost.com/wp-dyn/content/article/2009/09...
BEWARE OF TAX ISSUES WHEN SETTLING DEBT:
Publication 4681, "Canceled Debts, Foreclosures, Repossessions and Abandonments."
