UNDERSTANDING CREDIT CARD DEBT RELIEF
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When you are looking for credit card debt relief options, ask yourself what your priorities are. What do you want a relief program to do, exactly? Everyone’s debt situation may be different, but in most cases, finding a program that “gets you out of debt fast” is the priority.
Debt Relief comes in many forms – Finding the right program for your situation is the first step
All debt relief options will require a level commitment and discipline from you. Without this, there will be no success.
Also, it is so important that you choose the credit card debt relief program that is correct for your situation. You can usually make a couple different programs work, BUT there is always a single one program that BEST addresses your situation. A wrong choice can lead to higher fees, severely damaged credit and larger chances of failure. You can very well get yourself into a situation that is far worse than where you started.
Choosing the right company is critical. You seen, most relief companies only offer one or two programs. Most of the people you speak with are commissioned salespeople. This means they are in the business of “selling” you whatever “they” have to offer. This very well MAY NOT be in your best interest. You definitely want a company that has a good rating with the Better Business Bureau. Also, a company with more than 5 years history should be a prerequisite for your choice.
The right company will fit you with the best credit card debt relief program for your specific situation and provide a full-service approach, making everything much easier.
What Type Of Debt Relief Do You Need?
What type of debt is causing you the most hardship? Is it your mortgage? Unexpected Medical Bills?Credit Card Debt? For most people it’s a little bit of everything, but once they get help with one type of debt they can get back on their feet with the others.
Credit Card Debt Relief companies can assist you with credit card debt. The two main types of companies are Credit Counseling organizations which offer Debt Management Plans and Debt Settlement Companies that provide debt negotiation plans. These two options are vastly different so it’s important to know the difference.
A Credit Counseling Organization will place you into a repayment plan with your creditor at a lower interest rate. The payment plans normally don’t extend longer than 60 months (5 years) so the monthly payments tend to be rather high.
The main benefit is that since you are repaying the account at a lower interest rate more of your monthly payment is going towards the principal balance rather than the interest. If you already have low interest rates (10-15% range or lower) or are struggling to make minimum payments, this may not be the solution for you. However, if you have high interest rates and can comfortably afford your minimum payments, this may reduce the amount of time you’re in debt substantially.
A Debt Settlement Plan, on the other hand, will negotiate with the creditor to reduce the actual principal balance of the account to consider it “settled” and paid. It’s more aggressive than a creditor counseling plan, but will also offer more savings and likely lower monthly program payments. A debt settlement plan should be completed in a maximum of 36-48 months. However, the length of time to complete a plan with largely be based on the ability to make a larger monthly payment.
A Debt Dispute/Dismissal Plan will address the validity of the debt with the collectors and use federal credit law to dispute the debt. The FDCPA (Fair Debt Collection Practices Act) was put in place to protect the consumer against fraudulent collection practices. At the National Legal Debt Relief Center, we use this law along with 8 others to argue your debt and ultimately have it dismissed. Due to the fact that your debt is actually dismissed, we are then able to work with the credit bureaus to have your credit report reflect accurately that the debt is not yours and your score is impacted positively, as opposed to negatively, like with most other programs.