Credit Card Debt Relief Credit Card Debt Relief Program

Looking for the Best Credit Card Debt Relief Programs

One unfortunate side effect of the dramatic growth in the credit card industry over the past few years has been the increase in the number of consumers who are in debt trouble with their credit cards. In the current recessionary economic climate, with real estate prices falling and layoffs looming on the horizon, many consumers find themselves in a double bind: they are not only behind on their credit cards, but they also need IRS debt relief, or help with their mortgage, or are trying to avoid repossession of a car or other crucial asset. Hundreds of companies are on the Internet, advertising debt relief programs for credit cards and other forms of consumer debt. The problem is that not all of these companies have the consumer's best interests in mind, and not all of them work with consumers in the same way or with the same objectives. Let's take a look at the main forms of credit card debt relief programs. Then, you can decide which ones sound right for you.

Debt Settlement

Debt settlement companies offer to negotiate with your creditors in order to reduce the amount you need to pay back in order to settle the debt. This is a relatively new industry, and few regulations exist. One complaint that credit card companies voice about debt settlement is that these companies advise you to stop communicating with or paying your credit card issuer, with the result that the account goes into default. Before working with a debt settlement company to achieve credit card debt relief, program fees should be queried. You should also ask if they have testimonials from customers for whom they have successfully settled debts.

Credit Counseling

Most consumer credit counseling firms advertise their nonprofit status. Also, many of them are subsidized by banks and credit card companies. They will generally enroll you in a credit counseling and debt management plan (DMP) that will result in your paying off the full balance owed, usually over five years. Though these firms are nonprofit, their fees can be high, so you should obtain written fee schedules and do some comparison shopping before signing up for anything. An advantage of this type of credit card debt relief program is that nonprofit credit counseling firms can often get the collection calls to stop, and can "re-age" your account to remove the late or missing payments from your credit report.

Bankruptcy

If you are facing imminent repossession or foreclosure, bankruptcy may be the best way to protect your assets while you work out a plan for repayment. Bankruptcy programs temporarily relieve credit card debt by the court's protection. You should consult with a qualified attorney if you are thinking about filing bankruptcy, since it can stay on your credit report for up to ten years.