Hello my name is John Brown and I am assisting consumers that are in arrears with their credit cards for a quite some time and realize the negative consequences it has on someone’s life. When you have credit card debt and think that this matter is out of control, you must make a choice on what to do and make it ASAP. You do not want to wait until it is too late. As the majority of you must already know is that the creditors are not helpful when you call them with problems regarding you statement. It’s very exciting the way it works because when you first obtain the card they are the politest people on the phone. Then if you call them to complain about a past due or over limit charge and try to have it removed enough trying to maintain payments with 10% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to come up with the new payments now? It was painstaking enough to manage before the interest was raised. This is exactly why U.S. consumers are searching for other options such as 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 debtors who were having severe financial problems. Sadly it was misused by far too many debtors who were attempting to evade paying their unsecured debts.

They didn’t want to be held accountable for their actions. The credit card industry was sick and tired of this so they petitioned to have the bankruptcy legislation updated. It is now referred to as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. It would make it much more of a task for most Americans to file for chapter 7 bankruptcy. Bankruptcy should only be exercised as your last resort option after you have tried every alternative option. Also you should think of the negative aftereffects that very well might come back later on down the road. You would have to find a lawyer, go to court and that could cost you a lot of your hard earned income. There is also the negative effect of it being on your FICO history for a long time. When you sign any important application or document you by law have to answer yes when asked the question about bankruptcy, so this does have a very negative long lasting effect on your ability to obtain future credit.

Credit counseling

In each direction you look, either it is advertised on the radio or television, you will hear about credit counseling. A credit counseling agency will try to get the credit card companies to reduce the interest on your credit cards. You then make one monthly installment to the credit counseling agency and they then make your payments to each one of your creditors on your behalf. The downside to this choice is even though they reduce your APR on your credit card balances you could still pay back as much as 135% of what you currently owe.

This is because with this kind of program you will still be paying back what you owe plus some of the interest for around possibly five years or more. Almost half of the people that are in credit counseling don’t complete the program for missing as much as one payment. Another problem to credit counseling is that if you have a income problem and are cannot make your monthly payment they will boot you out of the program right away. They will also bump up your interest back up and the creditors could keep you off for at least one year and sometimes even longer. This could put you right back to where you started from, if not in a worse situation.

Credit Card Debt Settlement

This is the debt relief method where you can save the most amount of money. Competent credit card debt settlement companies will save you at least 40% of what you owe. The 40% should cover all of their charges. The same with credit counseling, you will hear a lot of radio and television ads very frequently. These organizations are starting up all over the United States. Some of these companies try to make it sound like they have a magic button and are going to make all your debt vanish instantly.

There are even many companies that try to use religion to attain the trust of people. Whatever organization you are speaking to it is your responsibility to due diligence on them. You should start with the BBB (Better Business bureau). You will be able to discover a lot about a company from the Better Business Bureau. If you find out that a company has only been in business for a little while and has a plethora of complaints towards them, then you know to stay away. Another thing to keep an eye out for is how much time has the company been in business. Some organizations only last a couple of years before they go out of business or get caught with their paws in the cookie jar. Then some of them only stay around to make as much money as they can and close shop just to open up down the streetafternoon.

John Brown is a credit card debt analyst with the US Consumer Advocate, which practices in credit card debt reduction.