Why would a credit card company accept less than what they are owed through debt elimination?
A. Private negotiation of debts is as old as the history of western civilization. It is particularly effective in the commercial context where the lender has only a monetary interest in mitigating loss on a particular account. This is particularly true given the relief that has been, and still is available under the bankruptcy code. Most banks will informally work with a debt elimination professional to give similar relief to the treatment available to unsecured debts in a chapter 13 plan where the payback is above the 65 % level.
