My name is Chris Rodgers and I am helping consumers that are in debt with their credit cards for a long time and am aware of the negative effects it has on people’s lives. When you have credit card debt and believe that this matter is out of control, you need to make a decision and make it as soon as you can. You do not want to put it off until it is too late. As the majority of you bye now already know is that the debt collectors are not co-operative when you call them with issues with your bill. It’s very exciting the way it works because when you first get the card they are pretty nice people while you are speaking with them. Then if you contact them to argue against a past due or over limit penalty fee and attempt to have it waived enough to try and maintain payments 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 searching for other options such as credit card debt settlement vs. credit counseling, or bankruptcy. If you do not know much about these options then I will give you a little information on them.
Bankruptcy
Before 2005 bankruptcy was to be used for people who were going through severe money troubles. Regrettably it was abused by thousands of Americans who wanted to avoid paying their debts. They didn’t want to be held accountable for their actions. The credit card industry was sick and tired of this so they pushed to have the legislation updated. It is now referred to as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. This would make it more difficult for most consumers to file for chapter 7 bankruptcy. Bankruptcy should only be made use of as your very last choice after you have tried every other debt relief option. Also you should contemplate the negative aftereffects that might come back later down the road. You would have to locate a lawyer, 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 report for a long time. When you filling out any important application or document you by law have to answer yes when inquired about your previous bankruptcy, so this does have a extremely long lasting effect on your ability to obtain future credit.
Debt Consolidation Credit Counseling
Everywhere you turn, either it is advertised on the radio or television, you will hear about debt consolidation credit counseling. A credit counseling company will attempt to get the credit card companies to lower the interest on your credit accounts. You then make one monthly installment to the consumer credit counseling company and they then make your payments to each one of your creditors for you. The down fall to this option is even though they lower your interest charge on your credit card accounts you might still pay back as much as 120% of what you actually owe.
This is because joining this sort 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 people that are in these programs don’t complete the program for missing as much as one payment. Another problem to credit counseling is that if you have a income problem and are short on your monthly payment they will kick you out of the program straight away. They will also bump up your interest back up and the creditor could keep you off for a minimum of one year and sometimes even longer. This might 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 method which can save you the greatest amount of money. Good debt settlement companies will save you at least 40% of what you are said to have to payback. The 40% should include all of their fees. The same with consumer credit counseling, you will hear a lot of TV and radio ads very frequently. These companies are opening up all over our beloved country. Some of these companies try to make it appear like they have a magical stick and are going to make all your debt disappear extremely easily.
There are also many companies that try to use religion to aquire the trust of consumers. Whatever company you are going with it is your responsibility to do research on them. You can always begin with the BBB (Better Business bureau). You will be able to discover quite a bit about a company from them. If you discover that a company has only been in settling debts for a little while and has a plethora of complaints against them, then you must avoid them. Another thing to look for is how long has the company been around. Some companies only survive one or two years before they go out of business or get caught stealing people’s money. Then some of them only stick around to make as much money as they can and close shop just to open up down the streetunder a new name.
Chris Rodgers is a debt analyst with the US Consumer Advocate, which practices debt relief.
Whether you just started bankruptcy or completed it, chances are you need to get a credit card and get established once again. It’s important not to trash your family’s good name. Take the time to pay back your debts and rebuild your bad credit. Do you want your children to learn bad habits when it comes to paying their bills? Do you want your children to learn from your mistakes? Make sure you apply for a bankruptcy credit card and get the credit score you deserve. It might take three or six months to build back your credit, but everything comes in time and having patience is paramount.
The distressing actuality here in the United States is that most of our beloved nation is stuck in credit card debt one way or another. The reports show that in the year 2008 the common family had ten thousand dollars in bills owed to the credit card industry The reason this state of affairs is so unwarming is because many debtors only make minimum payments. When you coalesce minimum payments and outrageously high interest rates you have a recipe for monetary disaster. This state of affairs is referred to by many as being stuck on the credit treadmill. When stuck in this spot someone can expect to be there for 30 years maybe more and put out tens of thousands in interest along the way. I would like to briefly go over in the rest of this writing on what some benefits are to being debt free.
The savings of money will be much easier when not stuck in debt. To save money is vital to at some point realizing financial freedom. And being ensnared with large sums of credit card debt and only affording to make the minimum amount owed each thirty days will catastrophically hamper your savings ability. So the first major advantage of becoming debt free is the ability to save extra money.
The next benefit of becoming free of the debt trap is linked to saving, and that is investing for future gain. Being able to invest your money would for the most part be enormously hard to accomplish if you must pay your debt requirements each month. When investing your funds you will make a profit, on the other hand paying down debt you are almost always guaranteed to be losing money. So as you can tell having monthly credit card debt payments is death to your financial future.
Last but ofcourse not least another huge plus to not having debt requirements is having additional money each month. What would your life be like if you kept the money you put out on debt requirements each month? What would you do spend more on your children or just simply have additional spending cash.
As you can tell there are many advantages to living a debt free way of life. For consumers striving to become debt free there are options that can help. One extremely popular system for debt reduction is debt settlement. Debt negotiation companies can help lower someone’s debt up to fifty percent of their current balance. One more alternative to getting out of debt is credit counseling. Whatever road you take be sure to do something if you are stuck in credit card debt. Visualize what life would be like if you could do the things I talked about above, saving more money, investing money, or simply having extra discretionary income.
Most people do not know very much about the new and upcoming fastest growing method of debt relief. Which is debt settlement. This way of reducing your debt has been growing substancially since the bankruptcy laws were changed in 2005. Many people who would of qualified for a Chapter 7 bankruptcy, which is a full discharge of debts owed, will now not qualify. Thus forcing many people into a Chapter 13.
Debt settlement has become for many people a much nicer alternative than having to file for a Chapter 13. Through both methods you will save close to the same amount of money, however with settlement the effect on one’s credit score will be no where near as severe.
I would definitely recommend for anyone who is considering bankruptcy to see if you could manage a debt settlement program that will take three years or less to complete. One major advantage of settlement of BK is that settlement is not a public record. However any type of bankruptcy will remain a public record for the rest of the debtor’s life.
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