Hello my name is Steve Bis and I’ve been helping people that are in arrears with their unsecured credit card debts for a considerable amount of time and am aware of the effect it has on their lives. When you have credit card debt and know that the situation is no longer something you can control, you must make a decision and make it quick. You don’t want to procrastinate until it is too late. As many of you must already know is that the creditors are not very easy to deal with when you speak to them with issues regarding you statement. It’s pretty interesting the way it works because when you initially obtain the card they are the politest people on the phone. Then if you contact them to dispute a past due or over limit charge 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 credit cards. How are you suppose to afford the higher payments now? It was cumbersome enough to manage before the interest was raised. This is exactly why Americans are searching for other options such as debt settlement vs. credit counseling, or bankruptcy. If you do not know much about these options then I will offer you a little bit of an education on them.
Be on the lookout
80% or more of the Debt Settlement Companies you see on TV, internet or hear on the radio are not the companies you will be working with. They are lead brokers and lead generation sites that sell your personal info to other companies. This is why, when you call them they will tell you someone will contact you back shortly and will only give you very little information. If you fill out the application over the internet you should get a call from that company that day or at latest the next day, Monday - Friday. Make sure you remember their name to see if it is some other company with a different name. Just write everything down so you don’t forget the names.
Consumer Bankruptcy
Prior to 2005 bankruptcy was to be used for debtors who were going through serious monetary hardships. Sadly it was abused by way too many Americans who were attempting to avoid paying their debts. They didn’t want to take responsibility for their actions. The credit card companies were fed up with this so they lobbied to have the legislation changed. It is now known as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. This would make it much more of a task for most consumers to file for bankruptcy. Bankruptcy should only be made use of as your very last choice after you have considered every other debt relief method. Also you should contemplate the consequences that will come back later on down the road. You would have to find a lawyer, go to court and that could cost you a substantial amount of your hard earned income. There is also the matter of it being on your FICO report anywhere from 7 to 10 years. When you filling out any significant application or document you by law have to answer yes when asked the question about bankruptcy, so this does have a extremely long lasting effect on your credit.
Consumer Credit Counseling
Everyway you look, either on TV or the radio, you will hear about consumer credit counseling. A credit counseling firm will attempt to get the credit card companies to reduce the interest on your credit cards. You then make one monthly payment to the consumer credit counseling firm and they then pay each one of your creditors for you. The downside to this choice is even though they reduce your interest charge on your credit card balances you very well may still pay back as much as 135% of what you actually owe.
This is because joining this kind of plan you will still be paying back what the full original balance was plus some of the interest for around 4 to 7 years. Almost 75% of the debtors that are in these programs don’t complete the program for one reason or another. Another draw back to credit counseling is that if you have a money problem and are miss your monthly payment they will boot you off of the program at once. They will also raise your interest back up and the creditors will not let you back on for around one year and sometimes even longer. This could put you right back to where you started from, if not in a tougher situation.
Credit Card Debt Settlement
This is the method which can save you the greatest amount of money. A reputable credit card debt settlement company will save you at least 40% of what you owe. The 40% should include all of their fees. Just as with consumer credit counseling, you will hear a lot of radio and television ads all the time. These organizations are starting up everywhere across the United States. Some of these companies try to make it seem like they have a magic stick and are going to make all your debt vanish overnight.
There are even some companies that try to use religion to attain the trust of debtors. Whichever company you are going to hire it is your responsibility to do research on them. You can always start with the BBB (Better Business bureau). You will be able to discover quite a bit about a company from the BBB. If you find out that a company has only been in operating for a short time and has a lot of complaints against them, then you must avoid them. One more thing to keep an eye out for is how long has the company been around. Some organizations only survive a short time before they get shut down or get caught ripping people off. Then some of them only stick around to make as much money as they can and close shop just to open up across the street using a different name and will continue to do this over and over again.
Steve Bis is a credit card debt analyst with the US Consumer Advocate, which practices in credit card debt reduction.
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