Credit card debt is easy to get into and almost impossible to get out of. If you are in debt, you are not alone. About ½ of all Americans have credit card debt. There is a way to get out of credit card debt and most people aren’t familiar with this technique.
By following a debt relief program, you could be debt free in as little as 24 months and pay off your debt for less than you owe. If you are drowning in credit card debt, debt relief might be a way to achieve debt-free status.
What Are My Options?
There are four options to work on clearing your debt. We’ll look briefly at all four.
Credit Counseling – credit counseling helps you learn to manage your debt and organize your finances. They’ll help you gain control of your spending and learn to budget. Getting out of debt is up to you.
Debt Consolidation – in debt consolidation, you take out a loan at a lower interest rate and pay off all your outstanding, higher interest debt. You then make pay off that one outstanding debt.
Bankruptcy – bankruptcy is a legal action to eliminate all debt and start over. This is a last resort as it ruins your credit rating for up to ten years. It is also expensive and complex.
Debt Relief – debt relief involves renegotiating how much you owe with the creditors and agreeing to repay a lower amount.
More About Debt Relief
If you are good at negotiating and have a lot of self-discipline, you can work on your own debt relief program. Most people don’t enjoy dealing with creditors or collection agencies, so a debt relief company will do it for you.
You will stop paying your credit card debt while the company negotiates with creditors on your behalf. It may get very unpleasant and you may get a lot of calls from creditors. While they are negotiating, you put money into a secured escrow account. As that account grows, you pay off your negotiated bills. Most people save between 20% and 50% on their outstanding bills. The debt relief company may also teach money management techniques so that you stay out of debt in the future.
Creditors may be willing to negotiate because any repayment is better than none.
The Pros of Debt Relief
On the positive side, debt relief allows you to pay less than you owe. If you follow the program, you will get out of debt.
The Cons of Debt Relief
There are some downsides to debt relief. It does take 2-5 years to get out of debt. However, the other options we discussed take almost as long.
Your credit rating will take a hit. Your report will note that you settle for less. However, as you stay out of debt, your credit rating will recover.
Debt relief can be expensive and there are fly-by-night companies that you need to avoid.
How to Pick a Debt Relief Company
The first step in picking a debt relief company is to start with an internet search. Check that the company is accredited and is in good standing. Read third party reviews to see what they say. Avoid companies who are not respected by others in the business community or that have bad ratings.
Read the website reviews and take the time to find reviews by real customers on third party websites. Read the fine print and fee schedule carefully. Double check to make sure the debt relief company is licensed in your state. Try to pick a company with more than 16 years of history.
Get Started Today?
If you are drowning in debt, start swimming for a debt-free future by starting an internet search for a reputable company. What are you waiting for?