|
Written by Jamie Simpson, LawServer Attorney-Editor
|
|
Last Updated November 5, 2008 |
|
In an unprecedented industry move, banks are partnering with consumer advocate groups to push a plan to allow credit card debt forgiveness, reports the L.A. Times. Financial institutions have determined that forgiving up to 40% of an individual's debt is more cost-efficient than continuing collections and default practices, eventually losing the customer completely. Under the proposed plan, as many as 50,000 Americans would initially be helped. Depending on their individual financial situation, a total of 40% of credit card debt may be forgiven under the plan. In addition, income taxes on the forgiven total would be delayed until the remaining balance is paid. Americans hold an estimated total of $900 billion in credit card debt currently. Bank charge-offs on balances increased 6.8% in August, a total increase of 48% since last year.
|
|
|
Comment (0)
Email
Print