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This is because on this kind of agenda you will still be paying back what the full original balance was plus some of the interest for around 4 to 7 years. Almost 80% of the individuals 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 cash flow problem and are short on your monthly payment they will kick you off of the program instantly. Debt settlement services have been helping out many people lately.

Tags: cash flow problem, credit counseling, debt settlement, settlement services

Hello my name is Joe Sellers and I’ve been assisting those that are in arrears with their unsecured credit card debts for a quite some time and understand the negative effects it has on someone’s life. When you have credit card debt and think that this matter is no longer in your hands, you need to make a choice on what to do and make it quick. You do not want to wait until it is too late. As the majority of you already know is that the debt collectors are not co-operative when you call them with issues regaurding your bill. It’s crazy the way it works because when you first obtain the card they are very polite people when you talk to them. Then if you contact them to dispute a past due or over limit charge and try to have it waived it can become difficult.enough to try and keep up with 10% 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 hard enough to manage before the interest skyrocketed. This is the reason U.S. citizens are seeking out other options such as debt settlement vs. credit counseling, or bankruptcy. If you are not familiar with any of your options then I will give you a little bit of an education on them.

Bankruptcy

Up until late 2004 bankruptcy was to be used for people who were experiencing serious money troubles. Regrettably it was abused by thousands of U.S. citizens who wanted to evade paying their credit card debts. They didn’t want to be accountable for their misgivings. The credit card industry was fed up with this so they lobbied to have the bankruptcy legislation 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 the majority of consumers to file for bankruptcy. Bankruptcy should only be used as your last resort option after you have considered every other debt relief method. Also you should think of the consequences that might come back later on down the road. You would have to find an attorney, go to court and that could cost you a substantial amount of your hard earned income. There is also the matter of it being on your FICO history anywhere from 7 to 10 years. When you sign any significant application or document you by law have to say 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

Everywhere you turn, either on TV or the radio, you will hear about consumer credit counseling. A credit counseling firm will try to get the credit card companies to reduce the interest rate on your credit accounts. You then make one monthly installment to the consumer credit counseling firm and they then pay each one of your creditors on your behalf. The fallback to this method is even though they reduce your APR on your credit card balances you could still pay back as much as 125% of what you currently owe.

This is because joining this kind of plan 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 individuals that are in credit counseling don’t graduate from the program for missing as much as one payment. Another downfall to credit counseling is that if you have a money problem and are short on your monthly payment they will kick you off of the program at once. They will also raise your interest back up and the creditors will not let you back on for a minimum of one year and perhaps even longer. This will put you right back to where you started from, if not in a worse situation.

Debt Settlement

This is the debt relief method where you can save the largest amount of money. Competent debt settlement companies will save you at least 40% of what you actually owe. The 40% should include all the fees as well. Very much like consumer credit counseling, you will hear a lot of TV and radio ads quite often. These companies are starting up everywhere across our beloved country. Some of these companies try to make it seem like they have a magic stick and are going to make all your debt disappear extremely easily.

There are even many companies that try to use religion to gain the trust of people. Whichever company you are speaking to it is your responsibility to due diligence on them. You should start with the BBB (Better Business bureau). You might be able to uncover a lot about a company from the BBB. If you realize that a company has only been in settling debts for a short time and has a lot of complaints against them, then you must avoid them. One more thing to keep an eye out for is how much time has the company been in business. Some companies only last a couple of years before they go out of business or get caught ripping people off. Then some of them only stay around to earn as much as possible and close down just to open up down the street.

Joe Sellers is a debt analyst and research assistant with the US Consumer Advocate, which primarily practices in credit card debt settlement or also known as credit card debt relief.

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