Your Debt Relief Options -
There are a lot of people out there shouting this at the top of their lungs. Let's face it, this country and more specifically, we who live here, have lots of debt. We are a nation of consumers and we are very good at it. To make matters worse, the business of lending money primarily through credit cards is a good business and there are new offers for credit cards in our mailboxes everyday!
What has resulted is a cycle whereby we buy more and more stuff using the short term loans that the credit card companies are all too happy to provide to us. It's all too easy and it causes many people to get in way over their heads when they wake up one day and they realize that even their minimum monthly debt payments are becoming unbearable.
So what are the ways we can get out of credit card debt? Here is the list of the most common methods from the most drastic to the least:
1. Bankruptcy - This used to be painful and quick but now the new bankruptcy laws have made it painful and slow thereby greatly reducing it's appeal for many people. The new bankruptcy laws require you to jump through more hoops which slow down the process including an extensive period of court approved credit counseling.
2. Debt Settlement - This solution is the bankruptcy alternative that many people use to reduce the overall amount of debt they owe without the stigma associated with a bankruptcy filing. Debt settlement is a legal process whereby you or a company you hire negotiates with your creditors to get them to accept less than you actually owe. This "settlement" is legally binding and once you pay the negotiated amount your account is considered paid in full with no further penalties. The downside is the damage it can do to your credit score since you will likely need time to save up the new amount agreed upon.
3. Credit Counseling - These companies which you often see advertised on TV will help you reduce your penalties and late fees but not your principle balance. They consolidate your debts into 1 monthly payment and then allocate the proper amount to each of your creditors monthly. Creditors take heart knowing that a credit counselor is helping you pay off the debt and so they typically reduce the monthly fees that can build up so fast making your situation even worse. Credit counseling companies can help you manage your money better and they typically provide lots of free financial education as part of their procedure. This solution is the easiest on your credit score however, can also take 5 or more years to become debt free depending on your income and your debt amount.
Of course there's also the old do it yourself method of saving and cutting financial corners everywhere you can. There is nothing wrong with that, it just helps to reach out to some type of professional help to keep you disciplined and to provide the support and guidance you will likely need on your journey to debt freedom.
What has resulted is a cycle whereby we buy more and more stuff using the short term loans that the credit card companies are all too happy to provide to us. It's all too easy and it causes many people to get in way over their heads when they wake up one day and they realize that even their minimum monthly debt payments are becoming unbearable.
So what are the ways we can get out of credit card debt? Here is the list of the most common methods from the most drastic to the least:
1. Bankruptcy - This used to be painful and quick but now the new bankruptcy laws have made it painful and slow thereby greatly reducing it's appeal for many people. The new bankruptcy laws require you to jump through more hoops which slow down the process including an extensive period of court approved credit counseling.
2. Debt Settlement - This solution is the bankruptcy alternative that many people use to reduce the overall amount of debt they owe without the stigma associated with a bankruptcy filing. Debt settlement is a legal process whereby you or a company you hire negotiates with your creditors to get them to accept less than you actually owe. This "settlement" is legally binding and once you pay the negotiated amount your account is considered paid in full with no further penalties. The downside is the damage it can do to your credit score since you will likely need time to save up the new amount agreed upon.
3. Credit Counseling - These companies which you often see advertised on TV will help you reduce your penalties and late fees but not your principle balance. They consolidate your debts into 1 monthly payment and then allocate the proper amount to each of your creditors monthly. Creditors take heart knowing that a credit counselor is helping you pay off the debt and so they typically reduce the monthly fees that can build up so fast making your situation even worse. Credit counseling companies can help you manage your money better and they typically provide lots of free financial education as part of their procedure. This solution is the easiest on your credit score however, can also take 5 or more years to become debt free depending on your income and your debt amount.
Of course there's also the old do it yourself method of saving and cutting financial corners everywhere you can. There is nothing wrong with that, it just helps to reach out to some type of professional help to keep you disciplined and to provide the support and guidance you will likely need on your journey to debt freedom.
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Source: http://www.articlealley.com/article_131297_63.html
Source: http://www.articlealley.com/article_131297_63.html
posted by Zee_1 at
12:35 AM
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