My name is Frank Loran and I’ve been assisting people that are in arrears with their credit cards for a considerable amount of time and realize the effect it has on someone’s life. When you have credit card debt and believe that this matter is out of control, you should make a choice on what to do and make it ASAP. You should not procrastinate until it is too late. As the majority of you bye now already know is that the creditors are not polite when you contact them with complaints with billing. It’s extremely remarkable the way it works because when you first get the card they are the politest people when you are speaking to them. Then if you call them to complain about a late or over limit penalty fee and attempt to have it waived enough trying to maintain payments with 8% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to deal with the elevated payments now? It was dreadful enough to manage before the interest was raised. 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.
Bankruptcy
Up until late 2004 bankruptcy was to be used for consumers who were having serious monetary problems. Sadly it was mistreated by far too many U.S. citizens who were trying to avoid paying their debts. They did not want to take responsibility for their misgivings. The credit card companies were sick and tired of this so they petitioned to have the bankruptcy laws changed. It is now known as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. This would make it much more of a task for most debtors to file for chapter 7 bankruptcy. Bankruptcy should only be made use of as your last resort option after you have considered every conceivable option. Also you should understand the consequences that could come back later down the road. You would have to hire an attorney, go to court and that could cost you a lot of money. There is also the issue of it being on your credit history for a long time. When you filling out any significant application or document you will always have to say yes when asked the question about bankruptcy, so this does have a very negative long lasting effect on your credit.
texas Debt Consolidation Credit Counseling
Everywhere you look, either on TV or the radio, you will hear about credit counseling. A credit counseling firm will attempt to get the credit card companies to reduce the APR on your credit cards. You then make one monthly payment to the consumer credit counseling firm and they then make your payments to each one of your creditors on your behalf. The drawback to this option is even though they reduce your interest on your credit card balances you could still pay back as much as 135% of what you currently owe.
This is because joining this sort of plan you will still be paying back what you owe plus some of the interest for around 4 to 7 years. Almost 80% of the people 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 money problem and are cannot make your monthly payment they will boot you out of the program at once. 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 will put you right back to where you started from, if not in a worse predicament.
Debt Settlement
This is the avenue which can save you the greatest amount of money. A good standing debt settlement company will save you at least 40% of what you currently owe. The 40% should include all of their charges. Just as with consumer credit counseling, you will hear a lot of TV and radio ads quite often. These organizations are opening up everywhere across our beloved country. Some of these companies try to make it appear like they have a magical wand and are going to make all your debt vanish extremely easily.
There are also many companies that try to use religion to gain the trust of debtors. Whatever company you are talking to it is your responsibility to due diligence on them. You can always begin with the BBB (Better Business bureau). You should be able to discover a lot about a company from the Better Business Bureau. If you see that a company has only been in settling debts 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 much time has the company been around. Some organizations only make it a couple of 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 down just to open up across townday.
Escaping the debt trap should be the most important thing to any consumer stuck deep in the credit card debt treadmill cycle.