This is by far the most profitable option for creditors, as it’s a trap that most consumers fall into. If you have ever taken this road, as most of us have, you essentially find yourself trapped in a life time payment plan.

The only upside to this plan, that is, if your payment are on time each and every month, you will have a positive reflection on your credit and not incur huge late fees and hikes in interest. Your credit however, will be reflected negatively if your credit card balances exceed 50% of your credit limit.

The downside is obvious, cost! Staying on this road is for life. If you have $30,000 in credit card debt at a 19% interest rate, it will take you over 50 years to pay down with a total payout of over $100,000

Filling for bankruptcy:

The first consideration is which type of bankruptcy you qualify for, chapter 7 or 13. If your income is above state means, you can only qualify for chapter 13 where you would be set up with a trustee and required to pay back a large portion of what you owe anyway. Not much relief there.

If you qualify for chapter 7, bankruptcy is reflected on your public record for life and stays on your credit report for 7 to 10 years. During that time, it makes almost impossible to get any type of loans from lenders as it would be with other debt relive options. When applying for a new job or loan, you are required by law to disclose filing for bankruptcy as it becomes your record for life.

Most financial experts agree that bankruptcy should only be considered as a last resort when nothing else will do. So before you decide to embark on that journey, you may want to look into other debt relief options such as settling your debt.

Debt Settlement Negotiation:

A relatively new approach to debt relief, debt settlement is ideal for consumers who are truly struggling making payments and want an alternative to bankruptcy. This is a process that can negotiate your balances down to a fraction of what you owe and get you out of debt in as little as 12 to 36 months, making it the fastest debt relief program.

Consumers save huge by paying anywhere from $0.60 to as low as $0.30 cents on a dollar that they owe, saving them a staggering amount of money. The creditors are willing to work with negotiations as well. They are much better off getting something than running the risk of consumer bankruptcy, where they get nothing. Complete details about debt settlement here.

Credit Counseling (Debt Consolidation):

Regarded as one of the more popular debt relief options, where consumers make one monthly payment to an agency and they distribute it to the creditors. The average length of this plan stretches from 5 to 7 years. The general goal of this program is a reduced interest rate that enables consumers to get out of debt quicker versus making minimum payments.

What they are reluctant to disclose is that the interest rate is not significantly lowered (if at all with some creditors) and remains as a revolving rate, which gets us into the credit card trap in the first place.

During the program, all credit accounts are closed and establishing new credit is virtually impossible. As for individuals that struggle making payments, this option does nothing to provide any cash flow relief.

All in all, credit debt settlement is one of the most important things that you need to know about if you are in heavy debt and the role played by the International Debt Collectors is even more egregious as they make sure that every penny is paid forth by the people and all accounts are settled.

About Admin

Norma is a professional writer and an aspiring author currently writing her first book. She loves to write about technological advancement and is a gadget lover herself.

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