by Moe Zilla

Created on: July 19, 2010

It may finally be possible to get a piece of the billions of dollars in taxpayer money that was given to banks as part of the "stimulus" package. If you're carrying thousands of dollars in credit card debt, your only option in the past was to negotiate a settlement with the bank that issued your credit card. What's different now is the banks have received a huge infusion of cash from the federal government - often taking the form of a massive loan at a 0% interest rate. So while that negotiation may still look the same, this time it's much more likely to work out better for you.

In order to avoid the stigma of receiving bail-out money, the federal government actually required every bank to receive the funds - even banks which were not in financial trouble. This means some banks actually have an excess of money lying around. And obviously there's some other banks which still have a number of bad home loans on their books, and they're worried about upcoming defaults. So if you're one of their debtors - though in this case, in the form of credit card debt - the banks are now very likely to cut you a favorable deal. And you'll receive the best terms possible if approach them with a "debt elimination service."

Here's how it works. You team up with a professional negotiator, who specializes in eliminating as much of the balance as they can. (In most cases, the negotiator's profits are a percentage of your debt that they've eliminated, so they're motivated to extract the largest concessions from the banks.) The bank really just wants to earn back their principal - and they're usually willing to forgive all the late fees and the compounding interest if it means they can get this debt off their balance books without having to take a loss. Often their next step is to sell the debt to a collection agency, so they'll actually appreciate the security of getting a reliable payment plan from a professional debt elimination service.

There is one downside to negotiating a debt elimination with your bank. I've heard that this can have a negative impact on your credit report. This is only going to be an issue if in the future, you're looking for a new loan for a car, furniture, or a home. It may also affect how willing banks are to give you a favorable interest rate on your next credit card. President Barack Obama insisted on adding a Consumer Financial Protection Agency as part of the stimulus plan, which will have some additional affects on the way consumers use their credit cards.  But the biggest advantage of federal stimulus plan may just be that now the banks are more willing to negotiate with you about your credit card debt!

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