Has unsecured debt got you losing sleep at night?

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Saturday, May 16th, 2009 Subscribe To Our Feed

As is well known this last year has been one of the most dreadful in terms of financial troubles. This recession has placed millions of US residents into very precarious financial situations. It appears like almost everything that could go wrong did go wrong. We are seeing record numbers in foreclosures, the people are losing jobs left and right, and to top it off consumer credit card debt has hit an all time high. These problems are leaving people searching for a workable form of credit card debt relief to aide them in getting back up on their feet. There are two popular forms of debt relief that people have been utilizing, and they are debt settlement and credit counseling.

Credit counseling is a plan offered and run by the credit card companies. The advantages of hiring a program like this are to have your bills consolidated into one monthly payment and to have the interest rate decreased. This is not a real method of debt reduction because the balance itself is not really lowered, just the APR. The negative aspects to this plan are that the payments often times aren’t much less than the payments a consumer was putting out to start with. In addition if you miss one payment you will forfeit the benefits of the program and be withdrawn.

Debt settlement is a much different method of debt reduction. With a credit card debt settlement program the benefits are saving funds and valuable time. In most situations the individual will save over fifty percent of what their balance previously was and see themselves out of debt in just a mere few years. Now there is a downside to credit card debt settlement this being the debtor must fall behind on the monthly payments for the creditors to be willing to work out a settlement. So naturally your credit history will suffer when you start this program. However after the settlements start getting made the credit history will rebound and go back up.

Both of the above mentioned plans aren’t for everyone. Which program is right for you depends on your particular financial state of affairs. I would say look into both methods and see which one fits your budgets and goals.

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