Credit Card Debt Relief

Credit card debt is a double edge sword, because it drives the economy with increased consumer spending, but it leaves Americans strapped with debt.  Until a few years ago, homeowners were able to run up credit card debt and then take out a second mortgage to consolidate the credit cards and high interest loans into a reduced payment fixed interest loan that even offered tax deductibility.  eliminate-debt_0

Unfortunately the home equity loan market did not perform well, once the mortgage industry crashed in 2007.  Since then mortgage lenders have strayed away from secured debt consolidation loans and the only way to consolidate debt was to take out a cash out refinance loan.  The real estate market went sour nationally and all of a sudden, very few Americans had enough home equity to refinance their credit card debt that they had grown accustom to consolidating.  The credit crunch caused consumers to max out their credit card lines and credit card debt has risen to record heights. 

With debt consolidation options disappearing, many Americans have shifted to debt settlement and bankruptcy for debt relief solutions.  When researching your options you must prioritize finding a debt relief company that has a proven track record that you can trust.  Debt negotiation has become a big business and there are plenty of credible debt settlement companies to choose from. Consider the pros and cons of debt relief before you commit to contracting a debt relief company for debt reduction services. 

First you must realize that the credit card debt relief process takes time and debt negotiations typically take 12-24 months depending on your cash flow. You need to understand that in most cases, your credit will suffer during the debt settlement process.  Creditors usually report you late while you are building funds to settle the credit card debt. Most consumers who seek debt relief already have credit issues as they are unable to afford the minimum payments.  After the credit card debt relief, you will have the opportunity to rebuild your credit while benefitting now from debt freedom.

Debt settlement is not for everyone…Some consumer will benefit more by using bankruptcy as a form of debt relief.  If you do not have enough income to save a portion for debt negotiation, then a chapter 7 bankruptcy may be the best solution.  If you fit into that classification, we recommend that you discuss your credit card debt concerns with a bankruptcy attorney in your state.

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