My name is Steve Bis and I’ve been helping people that are in debt with their unsecured credit card debts for a long time and understand the negative effects it has on their lives. When you have credit card debt and know that this matter is no longer in your hands, you would be smart to make a decision and make it as soon as possible. You don’t want to procrastinate until it is too late. As many of you bye now already know is that the collectors are not helpful when you call them with complaints with your statement. It’s very remarkable the way it works because when you initially obtain the card they are very polite people while you are speaking with them. Then if you call them to dispute a late or over limit penalty fee and attempt to have it waived enough trying to keep up with 9.9% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to afford the higher payments now? It was dreadful enough to manage before the interest skyrocketed. This is the reason U.S. consumers are seeking out other options such as credit card debt settlement vs. credit counseling, or bankruptcy. If you are not familiar with any of your options then I will offer you a little bit of an education on them.
Consumer Bankruptcy
Up until late 2004 bankruptcy was to be used for people who were having serious monetary troubles. Regrettably it was mistreated by tens of thousands of Americans who were trying to avoid paying their credit card debts. They did not want to take responsibility for their actions. The credit card companies were fed up with this so they petitioned to have the bankruptcy legislation changed. It is now known as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. It would make it more difficult for most Americans to file for chapter 7 bankruptcy. Bankruptcy should only be considered as your last resort option after you have tried every other debt relief method. Also you should contemplate the negative aftereffects that might come back later on down the road. You would have to locate an attorney, go to court and that could run you a lot of money. There is also the negative effect of it being on your credit report anywhere from 7 to 10 years. When you sign any significant application or document you will always have to answer yes when inquired about your previous bankruptcy, so this does have a very negative long lasting effect on your ability to obtain future credit.
Credit counseling
Everywhere you look, either it is advertised on the radio or television, you will hear about credit counseling. A credit counseling firm will attempt to get the creditors to reduce the interest rate on your credit cards. You then make one monthly installment to the credit counseling firm and they then make your payments to each one of your creditors for you. The fallback to this choice is even though they reduce the interest on your credit card accounts you could still pay back as much as 125% of what you actually owe.
This is because joining this sort of plan you will still be paying back what you owe plus some of the interest for around 4 to 7 years. Almost eighty percent of the consumers that are in credit counseling don’t finish the program for missing as much as one payment. Another problem to credit counseling is that if you have a cash flow problem and are short on your monthly payment they will boot you out of the program instantly. They will also bump up your interest back up and the creditors will not let you back on for at least one year and on some occasions even longer. This could put you right back to where you started from, if not in a worse situation.
Credit Card Debt Settlement
This is the debt relief method where you can save the largest amount of money. A reputable debt settlement company will save you at least 40% of what you owe. The 40% should include all the fees as well. Similar to credit counseling, you will hear a lot of radio and television advertisements quite often. These organizations are opening up everywhere across America. Some of these companies try to make it seem like they have a magic wand and are going to make all your debt disappear extremely easily.
There are even some companies that try to use religion to gain the trust of debtors. No matter what organization you are going to hire it is your responsibility to do research on them. You can always begin with the BBB (Better Business bureau). You may be able to discover a lot about a company from them. If you discover that a company has only been in business for a little while and has a slew of complaints against them, then you must avoid them. Another thing to keep an eye out for is how long has the company been around. Some organizations only survive one or two years before they go out of business or get caught ripping people off. Then some of them only stick around to earn as much as possible and close down just to open up right next doorafternoon.
Learn how much credit card debt settlement can help you out?