Howcome finding debt balances so high has be depressed
Jun 30, 2008 in General
Hello my name is Steve Bis and I am working with people that are in debt with their credit cards for a long time and realize the negative consequences it has on people’s lives. When you have credit card debt and know that the situation is no longer in your hands, you need to make a choice on what to do and make it fast. You should not put it off until it is too late. As the majority of you already know is that the creditors are not very easy to deal with when you contact them with complaints with your statement. It’s pretty fascinating the way it works because when you initially get the card they are pretty nice people when you are speaking to them on the phone. Then if you call them to dispute a past due or over limit charge and try to have it reversed enough trying to maintain payments with 8% or even the 7.9 % interest that they are charging on your credit cards. How are you suppose to afford the higher payments now? It was dreadful enough to manage before the interest was raised. This is the reason U.S. citizens are seeking out 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 give you a little information on them.
Bankruptcy
Up until late 2004 bankruptcy was to be used for individuals who were fighting through severe money hardships. Unfortunately it was mistreated by tens of thousands of debtors who wanted to avoid paying their debts. They didn’t want to take responsibility for their misgivings. The credit card industry was sick and tired of this so they lobbied to have the bankruptcy laws changed. It is now referred to as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. It would make it much more of a task for most consumers to file for chapter 7 bankruptcy. Bankruptcy should only be exercised as your last resort option after you have considered every other debt relief option. Also you should think of the negative aftereffects that might come back later on down the road. You would have to hire an attorney, go to court and that would cost you a lot of money. There is also the issue of it being on your FICO report anywhere from 7 to 10 years. When you filling out 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.
Consumer Credit Counseling
Everywhere you turn, either it is advertised on the radio or television, you will hear about debt consolidation credit counseling. A credit counseling company will try to get the creditors to reduce the interest rate on your credit cards. You then make one monthly installment to the credit counseling company and they then pay each one of your creditors for you. The drawback to this choice is even though they reduce your interest rate on your credit card balances you very well may still pay back as much as 120% of what you currently 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 4 to 7 years. Almost 75% of the debtors that are in credit counseling don’t finish the program for missing as much as one payment. Another problem to credit counseling is that if you have a money problem and are short on your monthly payment they will boot you off of the program immediately. They will also bump up your interest back up and the creditor will not let you back on for at least one year and sometimes even longer. This could put you right back to where you began, if not in a tougher situation.
Credit Card Debt Settlement
This is the option where you can save the most amount of money. A good 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 radio and television ads very frequently. These organizations are popping up all across the United States. Some of these companies try to make it seem like they have a magical button 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 people. Whichever organization you are going to hire it is your responsibility to due diligence on them. You should begin with the BBB (Better Business bureau). You might be able to find out quite a bit about a company from the Better Business Bureau. If you see that a company has only been in business for a little while and has a slew of complaints towards them, then you know to stay away. Another thing to keep an eye out for is how much time has the company been in business. Some organizations only survive one or two years before they go out of business or get caught stealing people’s hard earned dollars. Then some of them only stay around to make as much money as they can and close down just to open up across the streetunder a new name.
Debt settlement services help many Americans find debt freedom each and every year.