Would you like to know what methods of debt relief you have when you are drowning in debt and need assistance?

My name is Steve Bis and I’ve been helping those that are in debt with their credit cards for a while and am aware of the effect it has on their lives. When you have credit card debt and know that this matter is no longer something you can control, you should make a choice on what to do and make it ASAP. You do not want to put it off until it is too late. As the majority of you bye now already know is that the creditors are not co-operative when you call them with problems regarding you statement. It’s pretty exciting the way it works because when you first get the card they are pretty nice people while you are on the phone. Then if you call them to argue against a past due or over limit penalty fee and attempt to have it waived enough trying to maintain payments with 9.9% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to come up with the higher payments now? It was painstaking enough to manage before the interest was raised. This is the reason U.S. consumers are searching for other options such as credit card debt settlement vs. credit counseling, 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

Prior to 2005 bankruptcy was to be used for individuals who were fighting through serious financial problems. Regrettably it was misused by thousands of people who wanted to avoid paying their unsecured debts. They didn’t want to take responsibility 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 more difficult for many debtors to file for help. Bankruptcy should only be exercised as your last resort option after you have tried every alternative method. Also you should understand the consequences that might come back later on down the road. You would have to locate a lawyer, go to court and that would run you a substantial amount of money. There is also the issue of it being on your FICO report 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.

Consumer Credit Counseling

In each direction you look, either it is advertised on the radio or television, you will hear about consumer credit counseling. A credit counseling agency will attempt to get the credit card companies to reduce the interest on your credit cards. You then make one monthly payment to the credit counseling agency and they then make your payments to each one of your creditors for you. The fallback to this method is even though they reduce your interest charge on your credit card accounts you could still pay back as much as 140% of what you currently owe.

This is because with this sort of program 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 50% of the people that are in credit counseling don’t complete the program for missing as much as one payment. Another problem to credit counseling is that if you have a income problem and are cannot make your monthly payment they will kick you out of the program straight away. They will also raise your interest back up and the creditor could keep you off the program for a minimum of one year and on some occasions even longer. This will put you right back to where you started from, if not in a worse predicament.

Credit Card Debt Settlement

This is the method where you can save 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 fees. Similar to credit counseling, you will hear a lot of TV and radio ads very frequently. These organizations are starting up all across 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 disappear overnight.

There are also many companies that try to use religion to gain the trust of people. Whichever company you are going to use it is your responsibility to do research on them. You can always start with the BBB (Better Business bureau). You may 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 short time and has a plethora of complaints towards them, then you must avoid them. Another thing to look for is how long has the company been in business. Some organizations only last a couple of years before they go out of business or get caught with their paws in the cookie jar. Then some of them only stay around to make as much money as they can and close shop just to open up across townmorning.

Steve Bis is a debt analyst and research assistant with the US Consumer Advocate, which primarily practices in credit card debt relief.

- Steve Bis

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