My name is Joe Sellers and I’ve been working with those that are in arrears with their unsecured credit card debts for a while and know the effect it has on someone’s life. 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 don’t want to wait until it is too late. As plenty of you must already know is that the collectors are not co-operative when you speak to them with complaints with billing. It’s very interesting the way it works because when you initially get the card they are pretty nice people while you are on the phone with them. Then if you call them to complain about a past due or over limit penalty fee and try to have it reversed enough to try and keep up with 10% 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 dreadful enough to manage before the interest skyrocketed. This is exactly why Americans are searching for 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 information on them.
Bankruptcy
Before 2005 bankruptcy was to be used for consumers who were going through severe monetary problems. Unfortunately it was misused by way too many consumers who wanted to evade paying their credit card debts. They did not want to be accountable for their misgivings. The credit card companies were fed up with this so they petitioned to have the legislation changed. It is now known as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. This would make it harder for many Americans to file for bankruptcy. Bankruptcy should only be made use of as your very last choice after you have tried every other debt relief option. Also you should contemplate the consequences that will 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 your hard earned income. There is also the matter of it being on your FICO report for a long time. When you are signing any important application or document you by law have to answer yes when inquired about your previous bankruptcy, so this does have a long lasting effect on your credit.
You need to know
80% or more of the companies you see on TV, internet or hear on the radio are not the companies you will be working with. They are lead brokers and lead generation sites that sell your personal info to other companies. This is why, when you call them they will tell you someone will contact you back shortly and will only give you very little information. If you fill out the application over the internet you should get a call from that company that day or at latest the next day, Monday - Friday. Make sure you remember their name to see if it is some other company with a different name.
Credit counseling
In each direction you look, either it is advertised on the radio or television, you will hear about debt consolidation credit counseling. A credit counseling organization will try to get the credit card companies to reduce the interest rate on your credit cards. You then make one monthly payment to the consumer credit counseling organization and they then make your payments to each one of your creditors for you. The fallback to this option is even though they reduce your APR on your credit card balances you could still pay back as much as 135% of what you actually owe.
This is because joining 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 75% of the consumers that are in credit counseling don’t complete 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 miss your monthly payment they will boot you out of the program at once. They will also raise your interest back up and the creditor could keep you off the program for at least one year and on some occasions even longer. This could put you right back to where you started from, if not in a tougher situation.
Debt Settlement
This is the avenue where you can save the largest amount of money. Any competent Debt Settlement companies will save you at least 40% of what you currently 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 advertisements 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 magical wand and are going to make all your debt vanish overnight.
There are even some companies that try to use religion to aquire the trust of debtors. Whatever organization you are talking to it is your responsibility to do research on them. You can always begin with the BBB (Better Business bureau). You might be able to discover a lot about a company from the Better Business Bureau. If you see that a company has only been in business for a short time and has a lot of complaints against them, then you know to stay away. Another thing to keep an eye out for is how much time has the company been around. Some organizations only last a short time before they get shut down or get caught with their hands in the cookie jar. Then some of them only stick around to make as much as possible and close shop just to open up right next doorunder a new name.
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