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.
