Consumer Debt Options

Bankruptcy
This has the worst effect on your credit report. A bankruptcy generally stays on for 7 to 10 years and can even be featured in the local paper. This is the most public attempt to resolve debt and is can very costly. Bankruptcy should only be the absolute last resort after all other options have been closed off.

Consumer Credit Counseling Services(CCCS)
These companies provide us the commercials on television and radio which sound marvelous and impressive. Some people even think these organizations are set up by the government because they are a 'non profit' or 'not for profit' business. Well, what does that mean and how do they operate if they are non profit? First off, these organizations are not set up by our government. In fact, there are many consumer warnings at local, state, and federal agencies. And while they don't report profits and net gains, how do you think they pay their light bills and employee salary? The truth is you pay them indirectly through your creditors. They collect a percentage of every dollar they bring to your creditors. Be careful, if a company says they are 'non profit' or 'not for profit' you are most likely talking to a consumer credit counseling company. CCCS type agencies do not work for your best interest.

Remember, your creditors don't make money when you are debt free. They make money when you are making payments and falling further behind in debt. With CCCS you will repay every penny you owe including interest and extend the timeline and headaches. And, worse than all that, they are regarded as 'third party' settlements which fall under the same category as bankruptcy. This is looked upon very negatively by lenders because it allows them to pass judgment on you.  You would be astonished at the number of consumers and families who after valiant efforts in consumer credit counseling go on to file bankruptcy and absolutely destroy their credit for seven to ten years. What is more, the complaints are horrendous for CCCS companies. Some consumers complain that their creditors were paid late or, even worse, in some cases not at all.

Consolidation Loan
What about a consolidation loan or refinancing a current mortgage? This will save my good payment history, right? While this may sound good, there is another side you need to consider. While you will have good payment history you won't be out of debt. In fact, you will not only be more likely to lose your house (or whatever asset you put forth as collateral) should you enter another hardship, but, you will have another opportunity to run up those credit cards that put you in the situation your in the first place. Furthermore, you can't borrow your way out of debt; you have to pay your way out. Borrowing from Peter to pay Paul doesn't work for you in the long run and actually increases your risk of future financial tough spots. Getting out of debt requires a commitment from you. You didn't get in debt overnight and quite frankly, you're not going to get out of debt overnight either.

Having too much credit card or unsecured debt can actually hurt your credit. Your debt to income ratio is a big factor in your overall credit score. In fact, if you have too much revolving debt and good payment history some lenders will require you pay off some of the debt before extending a loan. Your credit tells a story of how you manage Debt and Income. When a lender pulls credit they are looking for a few things to be in place before they extend a loan or credit. Two of the biggest questions that must be satisfied for the bank are: (1). How much debt do you have and (2). How are you going to pay us back? Certainly having less credit card debt and more monthly income will work to your advantage..

Minimum Monthly Payments
Obviously, making minimum monthly payments is not getting you out of debt or has become too difficult or you wouldn't be looking for help. This is what we call the never ending treadmill of debt. Because 85% of your minimum monthly payments goes towards nothing but interest, you might as well be shoveling your money out the window.  Remember, your creditors make money when you are making payments. They love payments. They don't make money when you are debt free, they make money when you're are making monthly payments and falling further into debt. 85% of your monthly payment goes towards interest and a $10,000 debt will take over 50 years to pay off making minimum monthly payments.  The American consumer has literally made trillions of dollars for credit card companies. Now, if you are like most consumers who don't want to carry debt with them for the rest of their life or career, may we introduce you to...

Debt Settlement
Debt Settlement is the fastest and smartest way to become debt free. The good thing is you pay your debts off yourself first hand. This shows responsibility and strength of character on your credit report. You can negotiate the balance of any unsecured debt down to pennies on the dollar. You get out of debt faster because you only pay back a portion of the total balance. By reducing your total balance you can literally cut out years of future payments and headaches. How soon you get out of debt is totally up to you and how motivated you are in becoming debt free.

Debt Settlement allows you to do the right thing and pay off your debts yourself first hand showing responsibility and your strength of character. This tells any mortgage broker or lender that after a financial hardship you took care of your debts yourself and have no further obligation to them. Who wouldn't loan money to you? Our whole goal is to get you to the point where you can start living again and are not bound by the chains of debt.