May 15, 2009 - New Concessions Provide Debt Repayment Relief to More Consumers
The top 10 credit card issuers have agreed to implement changes to provide more affordable Debt Management Plans (DMP) and hardship programs for consumers, in a response to a Call to Action from the National Foundation for Credit Counseling (NFCC). The call to action is supported by American Financial Solutions and its fellow members of the Association of American Independent Consumer Counseling Agencies (AICCCA).
The concessions seek to provide debt relief for consumers without sufficient income to be successful on a traditional DMP. Without these special concessions, many consumers may be forced into bankruptcy. Those creditors supporting the Call to Action include American Express, Bank of America, Capital One, Chase Card Services, Citi, Discover Financial Services, GE Money, HSBC Card Services, U.S. Bank and Wells Fargo Card Services.
For more than 40 years, credit counseling agencies have been able to help consumers avoid bankruptcy and repay their debts through DMPs. Credit counselors work with a consumer’s creditors to arrange a DMP, which provides payment concessions, including waiving late and over the limit fees and a reduction in overall interest rates.
As the economy has tightened, fewer consumers have maintained enough income to be eligible for or to maintain a traditional DMP, often leaving bankruptcy as the only option.
The new concessions offer two new tiers of eligibility designed to make DMPs more accessible to a greater number of consumers. Additionally, under the new concessions, consumers are encouraged by their creditors and the credit counseling agencies to create savings accounts for financial emergencies.
"These concessions will make an important contribution to our ability to help more consumers weather the current economic uncertainty, and emerge on a stronger financial footing," said Henry (Hank) Keaton, president and CEO of American Financial Solutions, and Vice President of AICCCA.
"We applaud the creditors who have taken this very constructive step in partnership with the credit counseling industry to help consumers in difficult circumstances," he added.
Additional information about credit counseling and debt management plans is available on the American Financial Solutions' web site at www.myfinancialgoals.org.