Would you like to know what methods of debt relief you have when you are in debt and can’t survive without some sort of relief?

Hello my name is Steve Bis and I have been helping people that are in arrears with their credit cards for a while and understand the effects it has on someone’s life. When you have credit card debt and think that this matter is no longer something you can control, you should make a choice on what to do and make it fast. You do not want to procrastinate until it is too late. As many of you already know is that the creditors are not co-operative when you contact them with issues regarding your statements. It’s extremely interesting the way it works because when you first get the card they are the politest people when you call. Then if you call them to argue against a past due or over limit penalty fee and try to have it removed 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 pay for the new payments now? It was horrible enough to manage before the interest skyrocketed. This is the reason U.S. citizens 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.

Consumer Bankruptcy

Before 2005 bankruptcy was to be used for consumers who were experiencing serious monetary hardships. Unfortunately it was mistreated by far too many debtors who were attempting to avoid paying their unsecured debts. They didn’t want to be held accountable for their misgivings. The credit card companies were sick and tired of 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 more difficult for the majority of debtors to file for bankruptcy. Bankruptcy should only be exercised as your last resort option after you have explored every alternative option. Also you should contemplate the negative aftereffects that very well might come back later on down the road. You would have to locate a lawyer, go to court and that could cost you a substantial amount of money. There is also the issue of it being on your credit report anywhere from 7 to 10 years. When you filling out any significant application or document you will always have to answer yes when inquired about your previous bankruptcy, so this does have a long lasting effect on your ability to obtain future credit.

Consumer Credit Counseling

Everyway you turn, either it is advertised on the radio or television, you will hear about credit counseling. A credit counseling company will try to get the credit card companies to reduce the APR on your credit accounts. You then make one monthly installment to the credit counseling company and they then pay each one of your creditors for you. The drawback to this option is even though they reduce the APR on your credit card balances you could still pay back as much as 140% of what you currently owe.

This is because on this kind of agenda you will still be paying back what you owe plus some of the interest for around 4 to 7 years. Almost eighty percent of the consumers that are in these programs don’t graduate from the program for missing as much as one payment. Another draw back to credit counseling is that if you have a income problem and are short on your monthly payment they will boot you out of the program at once. They will also raise your interest back up and the creditors could keep you off for at least one year and perhaps even longer. This might put you right back to where you began, if not in a worse predicament.

Credit Card Debt Settlement

This is the method which can save you the greatest amount of money. A ethical debt settlement company will save you at least 40% of what you currently owe. The 40% should cover all of their fees. The same with credit counseling, you will hear a lot of TV and radio ads quite often. These organizations are opening up all across our beloved country. Some of these companies try to make it seem like they have a magic wand and are going to make all your debt disappear instantly.

There are also many companies that try to use religion to attain the trust of people. No matter what company you are going to hire it is your responsibility to due diligence on them. You can always start with the BBB (Better Business bureau). You should be able to discover quite a bit about a company from the Better Business Bureau. If you see that a company has only been in operating for a little while and has a slew of complaints towards them, then you know to stay away. One more thing to keep an eye out for is how long has the company been in business. Some organizations only last a couple of years 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 shop just to open up a few miles awayday.

Steve Bis is a debt analyst with the US Consumer Advocate, which practices debt relief.

- Steve Bis


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November 3, 2009 | Filed Under Business, Finance

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