My name is Joe S. and I have been working with consumers that are in arrears with their unsecured credit card debts for a quite some time and am aware of the negative consequences it has on people’s lives. When you have credit card debt and believe that the situation is no longer something you can control, you need to make a choice on what to do and make it quick. You should not put it off until it is too late. As the majority of you bye now already know is that the debt collectors are not helpful when you contact them with issues with billing. It’s very interesting the way it works because when you initially get the card they are very polite people when you talk to them. Then if you contact them to argue against a past due or over limit penalty fee and try to have it waived it turns out to be a hole differnt story. It can be difficult to try and keep up with 9.9% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to pay for the elevated payments now? It was bad enough to manage before the interest before it was raised. This is exactly why Americans are searching for other options such as the difference between credit card debt settlement services vs. credit counseling services, or bankruptcy. If you do not know much about these options then I will offer you a little bit of an education on them.
Consumer Bankruptcy
Before 2005 bankruptcy was to be used for consumers who were fighting through severe financial troubles. Unfortunately it was mistreated by far too many U.S. citizens who were attempting to evade paying their credit card debts. They didn’t want to be held accountable for their misgivings. The credit card companies were sick and tired of this so they lobbied to have the bankruptcy legislation changed. It is now referred to as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. This would make it harder for the majority of Americans to file for bankruptcy. Bankruptcy should only be made use of as your last resort option after you have considered every alternative option. Also you should understand the consequences that might come back later on down the road. You would have to hire a lawyer, go to court and that could cost you a lot of your hard earned income. There is also the matter of it being on your credit history for a long time. When you filling out any significant 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 credit.
Debt Consolidation Credit Counseling Services
Everywhere you look, either it is advertised on the radio or television, you will hear about consumer credit counseling. A credit counseling firm will try to get the credit card companies to lower the interest rate on your credit cards. You then make one monthly installment to the credit counseling firm and they then make your payments to each one of your creditors for you. The drawback to this option is even though they lower the interest rate on your credit card balances you might still pay back as much as 125% of what you actually owe.
This is because with 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 80% of the consumers that are in these programs don’t graduate from the program for missing as much as one payment. Another problem to credit counseling is that if you have a income problem and are miss your monthly payment they will kick you off of the program straight away. They will also increase your interest back up and the creditors could keep you off the program for a minimum of one year and perhaps even longer. This will put you right back to where you began, if not in a worse situation.
Credit Card Debt Settlement Services
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 are said to have to payback. The 40% should cover all of their charges. Just like credit counseling, you will hear a lot of TV and radio ads very frequently. These organizations are opening up all over the United States. Some of these companies try to make it appear like they have a magic wand and are going to make all your debt vanish overnight.
There are also some companies that try to use religion to aquire the trust of consumers. Whichever organization you are going with it is your responsibility to due diligence on them. You should start with the BBB (Better Business bureau). You should be able to discover quite a bit 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 plethora of complaints towards them, then you must avoid them. One more thing to look for is how much time has the company been around. Some organizations only make it a short time before they get shut down or get caught ripping people off. Then some of them only stick around to make as much money as they can and close shop just to open up right next door under a new name.