Why is life so hard when your stuck in debt?
My name is Steve Bis and I’ve been helping consumers that are in debt with their unsecured credit card debts for a while now and know the effect it has on their lives. When you have credit card debt and know that the situation is no longer in your hands, you would be smart to make a decision and make it fast. You do not want to wait until it is too late. As the majority of you must already know is that the creditors are not helpful when you contact them with issues with your bill. It’s extremely interesting the way it works because when you first obtain the card they are pretty nice people while you talk to them. Then if you contact them to argue against a late or over limit penalty fee and attempt to have it waived enough to try and keep up with 9.9% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to cover the new payments now? It was cumbersome enough to manage before the interest was raised. This is the reason Americans 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 give you a little information on them.
Bankruptcy
Up until late 2004 bankruptcy was to be used for debtors who were having severe money troubles. Unfortunately it was abused by tens of thousands of debtors who were attempting to evade paying their credit card debts. They didn’t want to be held accountable for their misgivings. The credit card companies were fed up with this so they pushed to have the laws changed. It is now known as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. It would make it much more of a task for most Americans to file for chapter 7 bankruptcy. Bankruptcy should only be made use of as your very last choice after you have tried every conceivable method. Also you should understand the consequences that very well might come back later on down the road. You would have to hire an attorney, go to court and that would run you a substantial amount of your hard earned income. There is also the negative effect of it being on your credit history for a long time. 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 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 agency will attempt to get the creditors to reduce the interest rate on your credit accounts. You then make one monthly installment to the consumer credit counseling agency and they then pay each one of your creditors on your behalf. The downside to this method is even though they reduce the APR on your credit card accounts you could still pay back as much as 130% of what you actually owe.
This is because with this kind of program you will still be paying back what you owe plus some of the interest for around possibly five years or more. Almost eighty percent of the consumers that are in credit counseling don’t graduate from the program for one reason or another. Another draw back to credit counseling is that if you have a money problem and are short on your monthly payment they will boot you out of the program instantly. They will also increase your interest back up and the creditor could keep you off the program for around one year and perhaps even longer. This could put you right back to where you started from, if not in a tougher situation.
Debt Negotiation (also known as debt settlement)
This is the avenue where you can save the greatest amount of money. A good credit card debt settlement company will save you at least 40% of what you are said to have to payback. The 40% should cover all of their charges. As with consumer credit counseling, you will hear a lot of TV and radio ads quite often. These companies are opening up all across the United States. Some of these companies try to make it appear like they have a magical bullet and are going to make all your debt disappear instantly.
There are even some companies that try to use religion to attain the trust of consumers. Whatever company you are going with it is your responsibility to do research on them. You can always start with the BBB (Better Business bureau). You should be able to uncover a lot about a company from them. If you discover that a company has only been in operating for a little while and has a plethora of complaints towards them, then you know to avoid them. Another thing to look for is how long has the company been in business. Some companies only last one or two years before they get shut down or get caught with their paws in the cookie jar. Then some of them only stick around to earn as much as possible and close down just to open up down the streetwith a different name] and will continue to do this until they decide it is time to stop.
You need to feel confident with the individual you are dealing with as well as the debt settlement company. If they are being pushy and trying to get you to sign a contract within the first few minutes of the call you need to be very careful. This is not a choice you want to dive into head first. Really, how can a company know they can help you out without reviewing your situation first? There are far too many companies out there that only tell you about the positive things about their program. They tell you not to be concerned about a thing. This is a extremely simple procedure and nothing bad can ever happen to you. That is a load of you know what. It is not a extremely simple procedure and it is not the best choice for every debtor. Some debtors still get duped by them because that company candy coated the entire process and did not fully disclose everything. For many consumers credit card settlement can really get you back on track and out of debt in three years or less, while saving you thousands of dollars off your balance.
Another thing to consider is a majority companies earn all their charges within the first year and a half of the the program. Now I will ask you this question, what reason will that company have to negotiate the best possible settlement on your behalf if they know that they are not going to earn any more money from you? There is none! So you see, if that company knows that why would they keep working on trying to get you the best settlement. This happens all the time. They really don’t care at that point. They take anything your collectors’ offer, which means you put out more of your hard earned money You need to find a company that makes its charges the old fashion way, by earning it. Make sure they answer all your debt settlement inquries. I hope this has offered you a better understanding of the different options you have to becoming debt free. Thanks and have a good [night.