Hello my name is Steve Bis and I am working with people that are in debt with their credit cards for a considerable amount of time and am aware of the negative effects it has on people’s lives. When you have credit card debt and believe that the situation is no longer something you can control, you would be smart to make a choice on what to do and make it as soon as possible. You do not want to procrastinate until it is too late. As plenty of you must already know is that the debt collectors are not co-operative when you call them with complaints with billing. It’s very remarkable the way it works because when you first obtain the card they are very polite people while you are speaking with them. Then if you contact them to dispute a past due or over limit charge and try to have it , they might let you off once a year, if you are lucky. When it comes down to it what choices do you have? It’s not like you can discontinue paying your rent/mortgage or other necessities for you and your loved ones to survive with day to day expenses.
The credit card companies made a whopping 17 billion dollars in controversial fees in 2006 and it will be much higher in the near future. Now I am sure that it has happened to you, where you’ve gone and open your monthly credit card statement only to realize that your interest rate has almost doubled in some cases tripled. It is rough enough to try and maintain payments with 10% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to afford the new payments now? It was bad enough to manage before the interest was raised. This is the reason Americans are seeking out other options such as credit card 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 debtors who were fighting through serious monetary hardships. Regrettably it was abused by far too many consumers who were attempting to evade paying their unsecured 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 bankruptcy legislation updated. It is now referred to as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. It would make it harder for the majority of consumers to file for chapter 7 bankruptcy. Bankruptcy should only be exercised as your very last choice after you have considered every other debt relief option. Also you should understand the negative aftereffects that very well might come back later down the road. You would have to find an attorney, go to court and that would run you a lot of money. There is also the issue of it being on your credit history for a long time. When you sign any significant application or document you by law have to say yes when inquired about your previous bankruptcy, so this does have a very negative long lasting effect on your ability to obtain future 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 try to get the creditors to lower the interest rate on your credit cards. You then make one monthly installment to the credit counseling agency and they then pay each one of your creditors on your behalf. The downside to this option is even though they lower your APR on your credit card balances you very well may still pay back as much as 130% of what you actually owe.
This is because on this kind of program you will still be paying back what you owe plus some of the interest for around possibly five years or more. Almost 80% of the consumers that are in credit counseling don’t graduate from the program for missing as much as one payment. Another problem to credit counseling is that if you have a cash flow problem and are cannot make your monthly payment they will kick you out of the program at once. They will also raise your interest back up and the creditors could keep you off the program for a minimum of one year and perhaps even longer. This could put you right back to where you began, if not in a worse situation.
Credit Card Debt Negotiation (also known as debt settlement texas)
This is the avenue which can save you the greatest amount of money. A honest credit card 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. Very much like credit counseling, you will hear a lot of TV and radio advertisements all the time. These companies are starting up all across our beloved country. Some of these companies try to make it seem like they have a magic bullet and are going to make all your debt disappear overnight.
There are also many companies that try to use religion to obtain the trust of debtors. No matter what company you are speaking with it is your responsibility to do research on them. You should start with the BBB (Better Business bureau). You should be able to uncover quite a bit about a company from the Better Business Bureau. If you discover that a company has only been in settling debts for a short time and has a plethora of complaints against them, then you must stay away. Another thing to keep an eye out for is how much time has the company been in business. Some companies only survive a couple of years before they get terminated or get caught with their hands in the cookie jar. Then some of them only stay around to make as much money as they can and close down just to open up down the streetusing a different name.