We here in U.S are on the edge of having a credit crisis. The sum of consumer debt is at an all time high and we are close what may be a recession. This is leaving many individuals with fewer dollars in there pockets and more bills that they have to pay on. In this article I will go over the ups and downs of the diverse available methods of credit card debt relief.
Credit Counseling Programs:
Pros- Consolidate monthly payments, reduced interest rates, fixed payment structure.
Cons- Takes a long time to pay off, stringent program rules, most do not complete program, hard to obtain mortgage on program, payments are not very low, one missed payment can result in being kicked off program.
Bankruptcy:
Pros- A full discharge of debts owed if you qualify for a Chapter 7, avoid collection calls.
Cons- Long term negative effect on credit score, lifelong public record, hard to qualify for a Chapter 7, court ordered repayment process.
Credit Debt Settlement :
Pros- Debtors can save a tremendous amount of money of what is owed, by far quickest route of getting out of debt, not made a public record.
Cons- Short term negative effect on credit, collection calls, possibility of lawsuit.
All of the above methods do have their respective pros and cons. However what really determines which system is right for you really depend on the current monetary situation that you are in. For Americans trapped deep in debt but have income to pay a portion of it off then debt settlement would be best, to help avoid bankruptcy. Those who have lower amounts of debt and have no issue making the payments they currently have plus more, than credit counseling is better. However there are some people out there who have literally no choice but to go into a bankruptcy proceeding.