This information will assist you with going over your options and learn what you can do when you’re deep in credit card debt.
by: Joe Sellers
http://www.uscaonline.com/
Hello my name is Joe Sellers and I’ve been assisting consumers that are in arrears with their unsecured credit cards for a while now and realize the effect it has on someone’s life. When you have credit card debt and believe that this matter is no longer something you can control, you should make a choice on what to do and make it ASAP. You don’t want to procrastinate until it is too late. As the majority of you already know is that the collectors are not helpful when you speak to them with problems with your statement. It’s very interesting 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 call them to try to have a past due or over limit fee reversed they are not likley to have any compation towards your situation as if it is bad enough to try keeping up with 9.9% or even the 7.9 % interest that they are charging on your credit cards. How are you suppose to cover the elevated payments now? It was dreadful enough to manage before the interest was raised. This is why many U.S. consumers are seeking out other options such as Bankruptcy, Debt Settlement or Credit Counseling. If you do not know much about these options then I will give you a little bit of an education on them.
Consumer Bankruptcy
Prior to 2005 bankruptcy was to be used for people who were having severe monetary troubles. Unfortunately it was abused by way too many Americans who were attempting to evade paying their credit card debts. They did not want to be accountable for their misgivings. The credit card industry was sick and tired of this so they pushed to have the laws changed. It is now referred to as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. This would make it harder for most debtors to file for chapter 7 bankruptcy. Bankruptcy should only be made use of as your last resort option after you have explored every alternative method. Also you should contemplate the negative aftereffects that might come back later down the road. You would have to locate a lawyer, go to court and that could run you a substantial amount of money. There is also the matter of it being on your FICO history for a long time. When you filling out any significant application or document you will always have to say yes when inquired about your previous bankruptcy, so this does have a extremely long lasting effect on your credit.
Did you know that over 80% of the credit card debt settlement companies you see on TV, the 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 who are willing to pay the highest price. They don’t care about the negative practices and the dishonest people involved with those companies. All they care about is how much money can be made off of you. One way to tell if it is a lead broker is when you call them, they tell you someone will have to call 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. A good way to remember a lot of details is to write everything down on a piece of paper especially the name and phone number of the person you were speaking with. Make sure you remember their name to see if it is some other company with a different name. So you need to remember with who and where you requested the information. If it was over the internet make sure that is the same company and that they are not going to sell your info to other companies, this way you don’t get flooded with a bunch of unwanted phone calls from 10 different companies.
Credit counseling
Everywhere 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 lower the APR on your credit cards. You then make one monthly installment to the credit counseling organization and they then pay each one of your creditors for you. The down fall to this choice is even though they lower the interest on your credit card balances you might still pay back as much as 140% 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 4 to 7 years. Almost 75% of the debtors 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 off of the program straight away. They will also bump up your interest back up and the creditor will not let you back on for a minimum of one year and perhaps even longer. This could put you right back to where you began, if not in a tougher situation.
This is the avenue which can save you the largest amount of money. A reputable credit card debt settlement company will save you at least 40% of what you are said to have to payback. The 40% should include all the fees as well. The same with credit counseling, you will hear a lot of radio and television advertisements very frequently. These organizations are popping up all over our beloved country. Some of these companies try to make it appear like they have a magic button and are going to make all your debt vanish overnight.
There are also some companies that try to use religion to obtain the trust of consumers. Whichever organization you are speaking with it is your responsibility to due diligence on them. You can always begin with the BBB (Better Business bureau). You may be able to discover a lot about a company from them. If you find out that a company has only been in business for a little while and has a plethora of complaints against them, then you must stay away. One more thing to look for is how long has the company been in business. Some organizations only make it a short time before they get shut down or get caught ripping people off. Then some of them only stick around to make as much as possible and close shop just to open up down the street. Hope this helped you out a little and have a good evening.
Joe Sellers is a debt analyst and research assistant with the US Consumer Advocate, which primarily practices in credit card debt relief here in the U.S.