Many of us have at one time or another suffered from easy to get credit cards and the associated financial disaster associated with misusing them. Among the many debt relief options that exist, the following 5 are the most commonly sought:
1) Bankruptcy, as of 2005, government legislation made it more difficult and burdensome, a Chapter 13 bankruptcy could result in higher monthly payments and may last longer than an alternate debt resolution program. This is not necessarily the ‘quick-fix’ to all your financial problems and we recommend you contact a lawyer licensed in your state to proceed with this.
Related: Find out how to pay off credit card debt.
2) Credit Consumer Counseling (CCC), a program whereby you sign a contract with their agency, agree to make pre-determined monthly payments for a pre-determined period of time, the payments are usually less than ALL of your regular monthly payments added up, hence the relief to you the customer, however, your debt is paid over a longer time, some card companies offer a lower interest rate, some eliminate the interest, but you will end up paying on this debt for up to 6 years! So long as you make EVERY payment as agreed and ON-TIME, your total debt is basically paid off, but if you miss one payment, you could be dropped from the program entirely. This method requires strict discipline on the part of the individual and is not for everyone! There is usually a small fee associated the with program as well.
3) Debt Consolidation Loan, for this to work for you, your own payment record will impact your ability to get the loan, any late payments on any credit payment will impede getting the loan. What typically happens is that you take unsecured debt (your credit cards and revolving loans) and you will use some kind of collateral, your home, car(s) or other tangible assets as security for the loan and in the end, you will be repaying all of the debt. This consolidation loan, when used in conjunction with a resolution program, provides a powerful fix for your debt solution.
4) Continue making minimum monthly payments on your debt, this doesn’t get any immediate help, it prolongs your debt payments out for about 30 yrs and in the meantime, you continue to incur huge interest amounts! Paying back at least 3 times or more of what you presently owe. Your existing debt will show up on your credit score and could impact any future loans until that debt is reduced, making it more difficult to obtain any type of loan, like a car, home or other.
5) Debt Resolution Program is an aggressive method of paying off a reduced portion of your debt so long as you make the timely agreed upon payments. This resolution is usually completed in 24-48 months. Thanks to a law imposed in 2010 by the FTC, debt resolution companies aren’t allowed to receive any fees until after your settlement has been reached. The fee for this is generally between 20-24% of the enrolled debt but it’s paid out over the length of the agreed upon time frame, so it is a fairly low monthly fee. This is probably the fastest way to resolve your unsecured debt.