Your options when trying to find the right debt settlement company
It is vital to comprehend your options and Know what to watch out for when trying to find the most reputable debt settlement companies.
by: Joe Sellers
http://www.uscaonline.com/
Hello my name is Joe Sellers and I have been assisting consumers that are in arrears with their unsecured credit card debts for a considerable amount of time and know the negative effects it has on someone’s life. When you have credit card debt and think that this matter is out of control, you need to make a choice on what to do and make it quick. You do not want to put it off until it is too late. As many of you bye now already know is that the collectors are not polite when you call them with issues regarding you statement. It’s very fascinating the way it works because when you initially obtain the card they are the politest people while you are on the phone. Then if you contact them to argue against a late or over limit penalty fee and try to have it removed enough trying to keep up with 10% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to afford the elevated payments now? It was dreadful enough to manage before the interest was raised. This is the reason U.S. consumers are searching for other options such as debt settlement vs. credit counseling, or bankruptcy. If you do not know much about these options then I will give you a little bit of an education on them.
Consumer Bankruptcy
Before 2005 bankruptcy was to be used for individuals who were fighting through severe financial problems. Regrettably it was misused by thousands of people who were trying to evade paying their credit card debts. They did not want to take responsibility for their misgivings. The credit card industry was fed up with this so they lobbied to have the 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 debtors to file for help. Bankruptcy should only be considered as your last resort option after you have tried every conceivable method. Also you should understand the negative aftereffects that might come back later on down the road. You would have to hire a lawyer, go to court and that would run you a lot of your hard earned income. There is also the issue of it being on your credit report anywhere from 7 to 10 years. When you sign any significant application or document you will always have to say yes when asked the question about bankruptcy, so this does have a extremely long lasting effect on your ability to obtain future credit.
Debt Consolidation Credit Counseling
Everyway you look, either on TV or the radio, you will hear about 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 for you. The down fall to this method is even though they reduce your interest charge on your credit card accounts you might still pay back as much as 135% of what you currently owe.
This is because on 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 50% of the people that are in credit counseling don’t finish 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 boot you off of the program right 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 started from, if not in a tougher situation.
This is the option 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 the fees as well. The same with consumer credit counseling, you will hear a lot of TV and radio advertisements quite often. These organizations are opening up everywhere across America. Some of these companies try to make it sound like they have a magic button and are going to make all your debt disappear extremely easily.
There are even many companies that try to use religion to attain the trust of debtors. No matter what organization you intend on hiring 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 Better Business Bureau. If you see that a company has only been in settling debts for a little while and has a lot of complaints towards them, then you must avoid them. Another thing to look for is how long has the company been around. Some organizations only survive one or two years before they go out of business or get caught ripping people off. Then some of them only stick around to make as much money as they can and close down just to open up across town within a few days.
Joe Sellers is a debt analyst and research assistant with the US Consumer Advocate, which primarily practices in credit card debt relief.