Guest Post by : Myrina Stein
A report by the Federal Reserve reveals that the total consumer debt in the U.S is almost 2.5 trillion. The Americans are indeed drowning in credit card debt. The recent financial depression has seriously hit the employment opportunities in the U.S. Consequently, people are running short of cash and increasingly relying on credit cards to survive. Therefore, it is no surprise that credit card debt has skyrocketed. An average American has almost $8000 in credit card debt which is quite shocking.
Are you a Bank of America customer with a lot of debt? Then don’t resort to debt settlement services immediately. The Bank of America has come to the rescue of the consumers with their debt settlement program. They are offering some great settlement rates and restructured payment plans. The bank of America has declared that it plans to settle 1.2 million accounts this year. This figure is almost 20% higher than the last year.
A spokes woman from the bank recently said that the assistance program will include reduction in interest rates, offering a repayment term that would extend to five years and settlement of debts for people who cannot pay back the entire debt. She added that the interest rates may be slashed to single digits for debt-strapped people. However, the terms and conditions of the settlement may vary from case to case.
The settlement percentage can be as good as 30% or even less. It involves either a lump sum payment or monthly installments. The bank has reportedly forgiven a large part of the outstanding balances of a huge number of customers. The bank claimed that they have shown extreme leniency in some and have even settled for $12,500 on $60,000 in debt. Debtors can take heart from such instances.
It might be relevant here to mention that the Bank of America has a Nationwide Home ownership Retention Program. With this program, the loan terms for countrywide borrowers can be modified. Apart from low-interest rate and term extensions, customers will also benefit from the principal forgiveness of forbearance. The eligibility for this program includes holding a countrywide originated mortgage loan, making less than six payments in total etc. The program is valid till December 2012.
It should be noted that the above mentioned debt relief programs are not for everyone. The Bank of America will choose people for their debt relief program on the basis of certain criteria. Their Nationwide Home ownership Retention Program, for instance, is expected to benefit not more than 10,000 homeowners. Therefore, keep your fingers crossed instead of being too hopeful.