Hi there my name is Josh Brown and I’ve been working with people that are in debt with their unsecured credit card debts for a while and know the negative effects it has on people’s lives. When you have credit card debt and know that the situation is no longer something you can control, you must make a decision and make it as soon as you can. You should not procrastinate until it is too late. As the majority of you bye now already know is that the collectors are not polite when you contact them with problems regarding you statement. It’s very remarkable the way it works because when you first get the card they are very polite people when you talk to them. Then if you call them to dispute a past due or over limit charge and attempt to have it waived enough to try and keep up with 9.9% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to come up with the higher payments now? It was dreadful enough to manage before the interest was raised. This is why many U.S. consumers are searching for 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 offer you a little bit of an education on them.

Consumer Bankruptcy

Up until late 2004 bankruptcy was to be used for families who were having severe money troubles. Regrettably it was misused by way too many debtors who wanted to evade paying their unsecured debts. They did not want to be accountable for their misgivings. The credit card companies were sick and tired of this so they petitioned to have the bankruptcy laws changed. It is now known as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. It would make it much more of a task for many Americans to file for help. Bankruptcy should only be exercised as your very last choice after you have tried every conceivable method. Also you should understand the consequences that will come back later down the road. You would have to hire an attorney, go to court and that could cost you a substantial amount of your hard earned income. There is also the matter of it being on your credit report anywhere from 7 to 10 years. When you filling out any important application or document you will always have to say yes when asked the question about bankruptcy, so this does have a very negative long lasting effect on your credit.

Credit counseling

Everywhere you turn, either it is advertised on the radio or television, you will hear about consumer credit counseling. A credit counseling organization will attempt to get the creditors to reduce the interest rate on your credit accounts. You then make one monthly payment to the consumer credit counseling organization and they then make your payments to each one of your creditors on your behalf. The down fall to this choice is even though they reduce your interest on your credit card accounts you could still pay back as much as 130% of what you actually 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 4 to 7 years. Almost 80% of the individuals that are in credit counseling don’t finish the program for one reason or another. Another downfall to credit counseling is that if you have a income problem and are miss your monthly payment they will boot you out of the program straight away. They will also increase your interest back up and the creditor will not let you back on for at least one year and perhaps even longer. This might 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 debt relief method which can save you the most amount of money. A good debt settlement company will save you at least 40% of what you owe. The 40% should include all the fees as well. As with consumer credit counseling, you will hear a lot of radio and television advertisements very frequently. These companies are starting up everywhere across the United States. Some of these companies try to make it appear like they have a magical stick and are going to make all your debt vanish out of nowhere.

There are also some companies that try to use religion to obtain the trust of people. Whichever organization you are going to hire it is your responsibility to do research on them. You can always begin with the BBB (Better Business bureau). You might be able to uncover quite a bit about a company from them. If you soon realize that a company has only been in settling debts for a little while and has a plethora of complaints against them, then you know to stay away. One more thing to keep an eye out for is how much time has the company been around. Some companies only survive 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 down just to open up a few miles awayusing a different name.

Josh Brown is a debt analyst and research assistant with the US Consumer Advocate, which primarily practices in credit card debt relief.