Capital One Debt Forgiveness

I read somewhere that credit card issuers such as JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Capital One Financial Corp. are proposing that they be let to forgive up to 40% of their clients debt. Are they okay?

Debt forgiveness, what does it mean?

I read somewhere that credit card issuers such as JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Capital One Financial Corp. are proposing that they be let to forgive up to 40% of their clients debt. Are they okay?

Debt forgiveness, what does it mean?

I think it's as simple as the banks wanting to get something rather than nothing from the consumers. Obviously, the consumers can't pay anymore, and if it helps to lower the balance (to motivate the consumers to pay) then they're all for it too.

This debt forgiveness project is headed by groups such as the Financial Services Roundtable and the Consumer Federation of America.

read somewhere that credit card issuers such as JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Capital One Financial Corp. are proposing that they be let to forgive up to 40% of their clients debt. Are they okay?

Debt forgiveness, what does it mean?

There is an industry called Debt Settlement and it has the same working principle as that debt forgiveness that the banks are proposing. I think it has been around for more than 5 years. Although in the past years, some creditors refuse to deal with settlement companies. It changed with the recession. They realized that something indeed is better than nothing.

How does debt settlement work?
The consumer enrolls in the program.
The qualifications are: Over $10,000 in debt amount and past due accounts
The program is about reducing the consumer's balance to more or less half of its original amount.
The settlement company writes the creditors/collection agency/law firm a power of attorney - meaning: from now on, they would deal with them on behalf of the consumer
The settlement company proposes an amount (lump sum or installment) to the creditors
via a settlement letter
If the creditors accept, they are agreeing that that amount be the full payment.

Can somebody state what those banks proposal is exactly?

Debt Forgivness proposal - JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Capital One Financial Corp.

"The banks are proposing that consumers who qualify for partial debt forgiveness be given five years to pay off their remaining balances, rather than the current three to six months.

They’re also proposing that consumers not have to pay taxes on any debt forgiven for five years, as opposed to the current requirement that such taxes be paid immediately.

To qualify, a cardholder would first have to see a credit counselor, who would use criteria provided by lenders to determine how much of the consumer’s balance could be waived — anywhere from 10% to 40%, depending on income, assets and other financial considerations.

No interest would be charged on the remaining amount of credit card debt."

It's still a proposal right?

Luckily, I agree with damon and graham, there is a debt settlement industry that could help consumers NOW rather than wait for that proposal to be approved.

If the consumer wants to know more about debt settlement, destroydebt.com is offering a free initial debt consultation, feel free to fill out a form.