Most small businesses have run into trouble because of the recession. It is not only the small businesses but individual credit card holders have suffered the most. There are a huge number of people who have amassed insurmountable amount of credit card debt. Are you too one of the people looking forward to eliminate credit card debt?
Eliminating credit card debt is the first step in leading a debt free life. However if your debt is large and can not be eliminated by counseling and debt consolidation the experts need to step in. Experts have recommended two methods to eliminate credit card debt.
One is bankruptcy and the other is debt settlement. You need to decide which option you will exercise.
Well, let me tell you there is no standard answer to this question. In one set of circumstances debt settlement may be a better route. In a given set of circumstances, the bankruptcy could be more beneficial than debt settlement. A closer look is needed here.
Let us talk of bankruptcy first. Under chapter 7 you enjoy homestead protection. In some states like Arkansas, Iowa, Texas and many other states you can enjoy unlimited homestead protection. Wise business men have parked millions of dollars in their home equity and enjoy legal protection in the eventuality of bankruptcy. In such cases bankruptcy is a better option.
However some states like Maryland provide no homestead protection at all. If you do not enjoy protection under bankruptcy then debt settlement will be the smarter way to eliminate card debt. So the situation could be peculiar to your state and home conditions. That will decide in what manner you eliminate credit card debt.
Eliminating credit card debt from America is not possible as the American economy is a debt driven economy. Debt can be classified into secured and unsecured. The commonly used debt facility by an average American is the unsecured debt in the form of credit cards. An average American man carries at least seven credit cards in his wallet. The credit card companies billing process is not customer friendly. There is a charge for absolutely everything with the credit card companies.
Late payment fee
Finance charges
Interest on finance charges
Payment collection charges
All charges put together a common man gets boggled looking at his statement that he ends up just paying the minimum charges for the month. An average American pays around $ 40 over and above the amount billed to him. His major problem is keeping too many credit cards and keeping a track of the transactions and bills. Today the American man is trying to eliminate credit card debts from his budget due to high charges levied by the credit card companies.
To get rid of the extra payment to the credit card company’s settlement seems to be an effective method. The debt settlement company allows consumers to get rid of the extra fee levied by the card companies and come to realistic figure on which the settlement can be done. It is averagely seen a good debt settlement company can give help to eliminate credit card debt up to 60% of the total unsecured debts.
Many Americans avoid taking this path as this has a negative impact on the credit history. The impact on the credit history lasts for around 2 to 3 years which can be rebuilt by timely payments in the settlement process. If the settlement process is not taken up the other alternative available is bankruptcy which impacts the credit history for around five years.
There are the essentials to be observed while choosing a debt settlement company.
The debt settlement company should be accredited by United States organization for Bankruptcy alternative or The Association of Settlement Companies. This accreditation shows that the company is aware of all the rules and regulations with regard to debt settlement and has been evaluated by a central body.
The debt settlement company needs to be certified by IAPDA to assure the customer regarding superior skills of debt settlement.
Article Source:http://www.articlesbase.com/finance-articles/eliminate-credit-card-debt-how-to-eliminate-over-60-of-your-credit-card-balance-1704219.html
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