Debt Consolidation Help

One of the most common sources of serious consumer debt is credit card spending.  When things get tight and we struggle to afford things, we rely more and more on credit cards and store cards to help us through.  Unless balances are paid off in full every month, the debt begins to mount up and very soon we can find ourselves struggling even to meet the minimum payments.

It is all too easy to delay doing anything about it when the debt first begins to accumulate, but it is surprising how quickly the credit card bills turn into a serious debt crisis.  When your credit card debts begin to total an amount that you cannot imagine ever being able to pay off, that is when the situation really cannot be ignored and has to be addressed.

Many people have heard that credit card settlement through negotiation with the card companies is an effective way to deal with this kind of debt problem.  It is true that most other debt solutions are inadequate once your debt gets past a certain level.  If you have enormous debts and not much spare income, you may struggle to meet the payments on a debt management plan.  A consolidation loan is unlikely to be the best answer either, as you will just transfer the debt to a new lender and be paying it off for even longer.

The big advantage of credit card settlement is that it involves negotiating an actual reduction in the overall debt that you owe, making it possible for you to then pay the balance off.  Debt settlement is the system used to achieve this in the US, but for UK residents the equivalent is called an IVA, which also results in debts being written off.

When it comes to successful credit card settlement, you have a choice to make about how you tackle the situation.  You can either use a professional debt settlement company to do all the negotiations and deal with your creditors for you, or you can learn how to do it yourself.  I would not recommend just launching into debt negotiation and thinking you will achieve good results, but it is certainly possible to do it yourself if you have the right advice and help.

To negotiate a successful credit card settlement yourself, there are lots of things you need to know about how card companies operate.  These include their policies on chasing debts, when they might take legal action, when and in what circumstances they may write the debt off, etc.  Unless you understand these things you will not know how to achieve the huge discounts that the professional negotiators manage to get.  Advice and step by step guidance on how you can do this for yourself is available in various forms.  The main attraction being that you save having to pay any of what you save to a debt settlement company.

The alternative is to use a debt settlement company to negotiate with the credit card companies for you.  You can typically expect a good negotiator to get between about 40% and 60% written off your debts.  The good companies will just take a proportion of whatever they manage to save you, so you can not lose out financially.  Another advantage of the best companies is that they will have relationships with most of the main creditors, and as they will be acting for many other people too, they in effect have more buying power and can therefore negotiate larger write-offs.

The only thing to watch out for if you want to use a debt settlement company is that you choose a good one.  Not just because some are clearly better at it than others, but because there are also lots of disreputable companies who would take up front fees and not achieve good settlements.  For this reason you have to ensure that you only approach companies that are very well established and who you know have already reached successful credit card settlements for many other satisfied customers.

The safest approach is to follow recommendations for reputable and experienced companies, and to apply to two or three of them so that you can compare the proposals they make to you.

Posted in Debt consolidation