23 News Financial expert Brad Gummow says many credit card companies are settling delinquent accounts for much less than is owed, sometimes half of the full balance. Creditors are even giving their front line employees permission to cut deals with debtors over the phone. As unemployment and defaults continue to climb, Gummow says card companies are taking this drastic action in hopes of collecting as much as they can now. He adds, after a balance has been delinquent for six months, regulations require the company to write off the loss. However not every should expect such a break.
Experts say five cents on the dollar is the most a credit card company can hope to get for its past due accounts. The new credit card reform act, that will limit interest rate hikes, went into effect January of 2010.