My name is Steve Bis and I’ve been assisting people that are in arrears with their unsecured credit card debts for a while now and am aware of the effects it has on their lives. When you have credit card debt and think that this matter is no longer in your hands, you should make a decision and make it as soon as you can. 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 very easy to deal with when you contact them with problems with billing. It’s extremely exciting the way it works because when you initially obtain the card they are pretty nice people when you are speaking to them on the phone. Then if you contact them to argue against a past due or over limit charge and try to have it , they might let you off one time a year, if that agent is in a good mood. When it comes down to it what choices do you have? It’s not like you can discontinue making payments on your rent/mortgage or other secured debts for your familyto make it with day to day expenses.
The credit card companies made a smooth 17 billion dollars in controversial fees last year and it will be a lot higher this year. Now I am pretty sure that it has happened to you, where you go and open your monthly credit card bill only to discover that your interest has more or less doubled or even tripled. It is rough 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 elevated payments now? It was painstaking enough to manage before the interest skyrocketed. This is exactly why Americans are seeking out 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 information on them.
Consumer Bankruptcy
Prior to 2005 bankruptcy was to be used for families who were experiencing severe financial hardships. Unfortunately it was mistreated by tens of thousands of debtors who wanted to evade paying their credit card debts. They did not want to be accountable for their actions. The credit card industry was sick and tired of 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 harder for most debtors to file for chapter 7 bankruptcy. Bankruptcy should only be exercised as your last resort option after you have tried every conceivable method. Also you should contemplate the negative aftereffects that will come back later down the road. You would have to hire a lawyer, go to court and that could run you a lot of money. There is also the negative effect of it being on your credit history anywhere from 7 to 10 years. When you sign any important application or document you will always have to say yes when inquired about your previous bankruptcy, so this does have a very negative long lasting effect on your ability to obtain future credit.
Debt Consolidation Credit Counseling
Everyway you turn, either on TV or the radio, you will hear about debt consolidation credit counseling. A credit counseling firm will try to get the credit card companies to lower the interest on your credit cards. You then make one monthly payment to the credit counseling firm and they then pay each one of your creditors on your behalf. The down fall to this option is even though they lower the interest charge on your credit card balances you might still pay back as much as 135% of what you actually owe.
This is because joining this sort of agenda you will still be paying back what the full original balance was plus some of the interest for around possibly five years or more. Almost 75% 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 income 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 could keep you off the program for a minimum of one year and on some occasions even longer. This might put you right back to where you started from, if not in a worse situation.
This is the debt relief method which can save you the largest amount of money. A reputable debt settlement company will save you at least 40% of what you currently owe. The 40% should include all the fees as well. Just as with credit counseling, you will hear a lot of TV and radio ads all the time. These companies 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 vanish overnight.
There are also many companies that try to use religion to gain the trust of consumers. Whichever organization you are going to use it is your responsibility to due diligence on them. You should begin with the BBB (Better Business bureau). You should be able to discover quite a bit about a company from the BBB. If you see that a company has only been in settling debts for a short time and has a slew of complaints against them, then you must stay away. One more thing to look for is how much time has the company been around. Some companies only make it a short time before they get shut down or get caught stealing people’s money. Then some of them only stick around to make as much money as they can and close down just to open up down the streetafternoon.