Bad Credit Debt Relief

The Two Most Common Ways to Get Rid of Out of Hand Credit Card Debt

Credit Card Debt is affecting the lives of tens of thousands of U.S. consumers during this economic downturn. The country will pull out of this slump and rebound strongly as it always does. However, the strains of debt on those who are having a hard time making ends meet can weigh strong on the minds of many. Unfortunately, for many, getting rid of unsecured debt with as little personal financial damage as possible is the only way to survive these hard times.

What can be done to accomplish this?

Debt relief is what many need today. There are two very popular ways to eliminate the majority of debt. Both programs have their advantages and disadvantages and the one that is right for any individual will depend on their personal circumstances. There is much blame to be spread around. Many make the argument that the state of the economy in recession is to blame for the scenario. Credit card companies are frequently blamed for the historic rise in credit card debt today. And then there are the consumers themselves who should consider that their debt issues are their own fault above any other excuse. Regardless of the cause, the damage has been done and solutions to the problems are what many need now.

Consumers have two of the most common ways of unsecured debt settlement at their disposal today. One of the most widely known debt relief programs is bankruptcy. Bankruptcy is heavily advertised when the economy is strong or weak, however, bankruptcy carries many serious side-effects and should only be considered as a last resort when dealing with credit card debt. A few of the consequences of filing bankruptcy are: the virtual destruction of one’s credit record, limited availability of personal credit for up to ten years, denial of apartment or home rentals because of the bankruptcy, being forced to pay possibly very high deposits on things like cable and satellite television, Internet, home phones and common utilities like gas, electricity and water. finally, the embarrassing possibility of being rejected for a job or promotion, as more and more employers are conducting credit checks as part of their normal screening for new job hires.

A less intrusive form of debt relief is debt settlement. Debt settlement is considered a more effective form of debt relief. Debt settlement works by having a debt settlement firm negotiate on behalf of the consumer with their creditors to facilitate an agreed upon reduction of the amount of credit card debt which the consumer owes. Debt settlement programs can reduce a consumers debt by 50% to 75% of the outstanding debt balance on unsecured accounts. Debt settlement is much easier on your credit ratings and does not carry the stigma or repercussions of bankruptcy. Of the two a negotiated debt settlement is the winner over bankruptcy almost every time.