Debt Relief Options | Credit Card Debt
Credit Exchange Center is dedicated to educating our clients and visitors on their options when it comes to credit card debt and consumer debt in general. Credit Exchange Center offers Debt Settlement Services to those who qualify.
How do you know if you need debt relief?
If you are living paycheck to paycheck.
If you are only making minimum payments on your bills.
If you use credit cards for gas purchases or for mortgage payments.
If you are unable to contribute to your savings account by 10%.
If you keep making balance transfers from one account to the other
If you have answered "yes" to any of the above questions, then you are possibly a candidate for professional debt settlement. Take action to rid yourself of credit card debt as soon as possible in order to secure your financial freedom.
If a consumer chooses to file for bankruptcy, then the creditor is aware that it would receive next to nothing or nothing at all for the owed debt and therefore, it is in the creditor's best
interest to get
a settlement agreement for balance owed as opposed to nothing at all.
CreditCard Crisis Ahead
Alternative Debt Relief Options:
1. Ch 13 or Ch 7 Bankruptcy.
Bankruptcy should be an absolute last resort option. Although, it is a viable alternative, it will negatively impact your credit for
7-10 years and can be an very stressful on a person both emotionally and financially. In October
2005, new laws made it more difficult
to file for bankruptcy. A more rigorous set of criteria was set in order to qualify for a Ch7 bankruptcy, which clears a consumer of all debt obligations. So the result is to apply for a Ch13 bankruptcy, which is a re-payment plan including interest over a period of time which can usually lasts approx. 5-10 years and destroys your credit in the process. Bankruptcy
2. Consumer
Credit Counseling / CCCS.
Programs like Consumer Credit Counseling were put in place to help out Credit Card Companies Default Risk. They usually come with a Non-Profit Status, but that DOES NOT MEAN that you are not paying for the program in the form of interest, balances in full, etc.. Consumer Credit Counseling is weighted the same as a bankruptcy on your credit and in the eyes of creditors. The programs last up to 5-7 years or
more and your principal balance of debt is not reduced at all. You will be paying back 100% debt owed plus reduced interest. This is how these non-profits are paid, through interest contracted with the creditors. Keep in mind, with CCCS, if one payment is missed, you
may be dropped from your program with no money refunded and as a result, you will put yourself in a worse position then you started with. CCCS programs, on
average, have accelerated rates of clients that cancel the program, which is not a sign of a successful debt management solution. Consumer Credit Counseling
3. Debt Consolidation
Loan.
A debt consolidation loan is just as it sounds. It is a loan with more interest. You then spread out your debt over a longer period of time and then pay a substantial amount of money in interest. In order to qualify for a debt consolidation loan, your credit must be in good standing and you must have equity in your home. Both of the these factors alone make it difficult qualifying during our economic state. If you have very large debt and are currently
late on one payment, most likely your
credit is already being affected negatively. Debt Consolidation Loan
4. Continue minimum monthly payments to credit
card companies.
This is the worst option that could result in a consumer taking over 30+ years to re-pay,
it will costs thousands of dollars in interest , and requires you to pay back over
three times what you currently owe. This particular option is the most costly, most time consuming, and most
economically disadvantageous way to get out of debt. Keep in mind that high balances on your credit cards will affect your
credit in a negative way and make it more difficult to obtain more credit. If you owe a high amount of interest, it reduces your ability to build a savings account. It does not make sense to pay 19% on interest while only gaining 3% on savings. The best way to secure your financial future is to pay off all of your debt and then begin socking away money into a high-yielding savings account. Paying Minimum Payments on Credit Cards.
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