CloseConsumers are often barraged with options on dealing with credit card debt, and everyone says that they have the answer. As you examine your debt relief options, you will start to realize that settling credit card debt is the best answer.
Bankruptcy
Some people immediately turn to bankruptcy as a way of settling debt and getting their finances back under control. The biggest misconception that people make about bankruptcy is that the process wipes away all credit card debt and allows the consumer to start over.
The truth is that bankruptcy still holds you accountable for your debt by creating a repayment plan for you. In some cases, debt may be discharged if the bankruptcy court feels it is a necessary part of the process. But in most cases, you will still be responsible for paying back much of your debt.
Bankruptcy is something that stays on your credit profile for up to 10 years and can cause you a lot of issues. Prospective employers and landlords will see your bankruptcy and it could prevent you from getting a good job and a nice place to life.
Personal Budgets
Some people attempt to handle their credit card debt on their own by developing a personal budget. If you wait until your finances are spiraling out of control to develop a budget, then it may be too late to use your own resources to handle the situation.
A personal budget is a great tool for balancing your checkbook and monitoring your spending. When used properly, a budget will allow you to see financial problems before they get out of control. But if it is used too late in the process, then a budget is not really going to help.
If you can find extra cash each month by using a budget, then the chances are that it will not be enough to address your bills. You need to start a budget early in the process for it to really help you grab your expenses and get them under control.
Debt Consolidation
Thanks to a persistent barrage of television commercials, many people feel that debt consolidation is the best way to lower your debt. Consolidation moves your debt from your credit accounts to a loan. Rather than addressing your debt, it just shuffles it around.
Part of getting in to credit trouble is making late payments to credit cards and skipping payments altogether. Over the course of a few months, this kind of activity will lower your credit score to the point where you may not even qualify for a consolidation loan.
If you have bad credit, then you will need to settle for a high interest rate or you will have to put up your valuable possessions as collateral. The high interest rate may make the consolidation loan more expensive than your debt and not everyone has valuables to secure a consolidation loan.
Debt Settlement
Settling credit card debt remains the most effective way to get your obligations under control. A debt negotiation expert works with your creditors to lower your payoff amounts and then develops an account for you where you make one monthly payment to address all of your accounts.
No Credit Needed
You can get a debt settlement agreement even if you have the worst possible credit. The settlement process does not rely on your ability to get a loan to be effective.
Reduces Your Debt
Debt settlement can reduce your debt by up to 50 percent and lower the overall cost of your obligations. This is a real reduction in your debt and not just moving your credit from one account to another. It is a way to lower your monthly payments by hundreds of dollars and help you free up the cash that you need to pay off your debt.
With debt settlement, you do not need to sacrifice your valuable belongings and you do not need to try and qualify for a loan. Before you even consider bankruptcy, you need to talk to a debt settlement company about your situation.
A debt settlement organization will help you develop a budget that works because your credit card debt will be severely slashed. You will be given the skills you need to recapture your good financial health.
Fill out our online form and let one of our debt settlement experts get you started with a comprehensive financial review today.
