As American consumers are seeking debt help in huge numbers, the increased use of debt settlement as a stepping stone to debt recovery is not surprising. While there have been naysayers over the years that said debt settlement was a scam, the whole notion of it as a workable and valuable solution is back by the U.S. Government. Laws were passed that totally protect the consumer during the process, and put stringent rules on how debt relief companies work. If there’s true credit card relief around these days, debt settlement is it.
Debt settlement is a freedom debt relief. That means that it is possible to eliminate debt because it takes less to pay it off after the balances have been negotiated with a consumer’s lenders iva. The process is straight-forward. A consumer stops paying their monthly payments, penalties or fees to a creditor. When the credit card company realizes they may not receive any more payments toward the debt, they are likely to accept far less than is owed them. Of course, they could sue or put liens on property, but with so many Americans deeply in debt, it is much more common for them to decide to settle. Professional negotiators from good debt relief companies make a difference at this point because of their knowledge of how each lending institution works, how they negotiate and at what point they will employ credit card forgiveness.
As a part of the money that Wall Street received from the U.S. Government, portions of it were earmarked to help consumers directly, and it is another reason that creditors are more likely to reduce balances by larger percentages. They have the incentive. When the government also realized that debt settlement was a legitimate option to help consumers, they then passed laws to protect them. No reputable debt company will charge any fee before a creditor is paid off. It is only after the consumer has an account closed that the debt relief company receives their fee. Think about it. Do lawyers or doctors or tax accountants wait months or years before they want their fee. No, of course not, but that’s exactly what American debt relief requires. The consumer must succeed before there is a fee to pay. It is one of the better deals found anywhere.
Debt settlement takes discipline. It takes religiously putting money aside that will go to pay creditors and sometimes that isn’t easy. The very reason a consumer gets into debt problems is poor budgeting and spending habits or loss of a job. The process requires a concentrated effort to save money during the debt restructuring process. Even with heavy debt, it is possible to be free and clear in three to five years, and that’s half the time that bankruptcy sticks to a credit report and on public records.
Consumer credit problems are literally consuming the United States and for any number of reasons. First, it was easy to get credit cards, then it was high interest rates, then it was overspending because credit loans were simple to get, and then the economy took a hard dive and has yet to recover completely. Many Americans lost their jobs or took salary cutbacks in order to stay employed, homes were foreclosed upon and consumer debt reached the $2 trillion mark. In reactionary states of financial trouble, many turned to the traditional debt consolidation method without considering the consequences.
Getting a debt consolidation loan is easy if one has collateral, and if the debts are very high, it means a second mortgage on a home if no other hard asset is available. Suddenly, to pay off some credit card bills, one is endangering the very roof over his head. It doesn’t sound like a very intelligent move, does it? It isn’t. The only parties it works out well for are the creditors, who get paid off, and the banks, who get paid back – or else they take the property. For the consumer, it is debt advice is is akin to walking a tight rope with no safety net. This is not the economic time to gamble on debt relief consolidation. It is the time to reduce the average credit card debt, eliminate as much risk as possible and get back on track.
Debt settlement and debt management are two far better and less risky solutions. They are not perfect, but managing one’s way out of a debt problem usually isn’t without a windfall, and these two programs come closest to offering just that. Because both work with debt restructuring, it means that creditors start to cut the amount of balances owed to them in order to recoup at least a portion of what is due them. That boils down to the consumer paying less than what they owe. It eliminates debt, purely and simply. Debt consolidation loans do not do this. They rearrange the debt and add to it, and for a much longer period of time than most consumers want to think about. If there’s a choice between remaining in debt for another thirty years or looking forward to being debt free in three to five years, the choice seems obvious, and it is no surprise that hundreds of thousands of American consumers are now using these methods as their number one credit debt help. It is not necessary for debt consolidation loan and consumer credit to depend on one another.