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My name is Steve Bis and I am working with consumers that are in debt with their credit cards for a while now and know the effects it has on someone’s life. When you have credit card debt and think that the situation is out of control, you should make a choice on what to do and make it fast. You should not wait until it is too late. As many of you already know is that the collectors are not very easy to deal with when you call them with issues regarding you statement. It’s very interesting the way it works because when you first get the card they are pretty nice people while you talk to them. Then if you contact them to dispute a past due or over limit penalty fee and attempt to have it waived enough trying to keep up with 10% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to pay for the new payments now? It was cumbersome enough to manage before the interest skyrocketed. This is the reason Americans are seeking out other options such as credit card debt settlement vs. credit counseling, or bankruptcy. 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 families who were going through serious monetary hardships. Unfortunately it was abused by way too many U.S. citizens who wanted to avoid paying their unsecured debts. They did not want to take responsibility for their misgivings. The credit card industry was sick and tired of this so they lobbied to have the bankruptcy laws changed. It is now referred to as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. It would make it more difficult for the majority of consumers to file for bankruptcy. Bankruptcy should only be considered as your last resort option after you have explored every other debt relief option. Also you should understand the negative aftereffects that very well might come back later down the road. You would have to find an attorney, go to court and that could cost you a lot of your hard earned income. There is also the problem of it being on your FICO report for a long time. When you are signing any important application or document you by law have to answer yes when inquired about your previous bankruptcy, so this does have a long lasting effect on your ability to obtain future credit.

Consumer Credit Counseling in Texas

Everyway you look, either on TV or the radio, you will hear about credit counseling. A credit counseling organization will attempt to get the credit card companies to reduce the interest rate on your credit cards. You then make one monthly payment to the credit counseling organization and they then pay each one of your creditors on your behalf. The downside to this option is even though they reduce the interest charge on your credit card accounts you very well may still pay back as much as 120% of what you currently owe.

This is because joining this sort of agenda you will still be paying back what the full original balance was plus some of the interest for around possibly five years or more. Almost 50% of the individuals that are in these programs don’t finish the program for missing as much as one payment. Another downfall to credit counseling is that if you have a income problem and are cannot make your monthly payment they will boot you off of the program straight away. They will also bump up your interest back up and the creditors could keep you off the program for around one year and on some occasions even longer. This could put you right back to where you began, if not in a tougher situation.

Credit Card Debt Negotiation (also known as debt settlement)

This is the avenue which can save you the most amount of money. A reputable credit card debt settlement company will save you at least 40% of what you owe. The 40% should include all the fees as well. As with credit counseling, you will hear a lot of TV and radio advertisements quite often. These companies are starting up everywhere across America. Some of these companies try to make it appear like they have a magical stick and are going to make all your debt vanish extremely easily.

There are also many companies that try to use religion to obtain the trust of debtors. Whichever company you are going to use it is your responsibility to due diligence on them. You should start with the BBB (Better Business bureau). You might be able to find out a lot about a company from the BBB. If you realize that a company has only been in operating for a little while and has a slew of complaints against them, then you know to avoid them. Another thing to keep an eye out for is how long has the company been in business. Some companies 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 right next doormorning.