Statistics On Credit Card Debt

If you take a look at statistics on credit card debt in places like Arizona, you will see that many people are in way over their heads. You may feel that this description applies to you, too. The housing crisis and the other assorted economic disasters that have struck the United States have taken their toll in many different ways. People focus on the unemployment numbers, but the truth is that even those who remain employed are suffering. Credit card debt has gone way up for certain sectors of society and, with rates the way they are, it is unlikely that these debts will ever be paid off.

Some companies and agencies are making money from offering solutions to people facing this dilemma. The debt consolidation loan is very popular. In this scenario, a company offers you a loan to pay off your credit cards. Once they are paid off, you continue servicing your debt through them in one monthly payment. The idea is that it is easier to manage one large payment. They also try to offer an interest rate that is, at least, marginally better than the various rates that you may have been paying.Another type of company offers to help negotiate with your creditors for a fee. The goal of these negotiations is usually a reduction in APR or a waiving of fees. This makes monthly payments easier to manage, and it also makes it more likely that you will be able to pay off your debt in the long run. There is a more direct approach which can truly liberate people from credit card debt in a short period of time. Their method may seem drastic, but it has proven to be effective in eliminating debt and helping customers start their economic lives over again as soon as possible. This method is known as settlement.

How Settlement Works

In order to initiate settlement, you must contact a debt adviser now and be prepared to explain some details about your debt situation. This may include the names of companies to which you owe debts and the size of those debts. If the adviser agrees that you are a candidate for the type of help that they provide, you can get started on your debt solution plan almost immediately.

The first thing that you need to do is to stop paying your credit card debt. In fact, part of the agreement that you will make with your debt adviser is that you will not communicate with your creditors at all. We will now represent you in these situations.

Instead of paying your credit cards, you will make one large payment to your debt consolidator. This is not a loan payment. A part of the payment will serve as a fee for the service. The rest of the money will begin to accumulate in a fund that your debt consolidators will manage.

Once these deposits reach sufficient size, a negotiator will begin to offer lump sums to your credit card companies. These sums will rarely, if ever, be equal to the total amount owed. Instead, your creditors will be tempted by the opportunity to get a large sum all at once and put an end to the months or years of hassling you for payment. In return for payment, they close your account and your credit rating begins to heal.

Over the course of 24 to 48 months, all of your credit card debt can usually be eliminated in this fashion. When that time period ends, you should be completely free of credit card debt. Your credit history will be so good at the end of this process that you will probably receive more credit card offers in the mail.

Benefits of Settlement

Settlement is preferable to bankruptcy. After you declare yourself bankrupt, your credit score may suffer for as long as ten years. Taking the settlement route, you can get through this ordeal and come out with a clean credit history in just three or four years. Also, many people are attracted to settlement because it pays off debts rather than erases them. The negotiations with creditors are completely legitimate.

Cons

You should be aware that there are some downsides to this solution. During the process, your creditors can be very aggressive about contacting you for payment. Furthermore, until it is over, your credit score will be badly damaged.

If you want to avoid becoming data in the statistics on credit card debt, contact us immediately. Explain your situation and see if you and your debts qualify for their solution. You could be debt-free in just a few years.