Credit Card Debt Relief in Plain English

The initial step to seeking help is to be aware of your alternatives. As consumers continue to struggle to eliminate credit card debt, many are searching for help but don't know the different options available. This lack of awareness can make consumers feel vulnerable and consider debt counseling services to be suspect. Debt relief help doesn't have to be confusing, and educating yourself can appease concerns about being mistreated.

There are several possibilities available, however the two most successful and regularly used ones are credit counseling and debt settlement:

Credit Counseling

Credit Counseling is also referred to as Debt Management. It calls for negotiations with creditors to reduce interest rates and fees on your credit cards so that you can pay one consolidated monthly installment to a credit agency, that is utilized to pay all creditors. Credit counseling is not an easy option and, sometimes takes 3-5 years to complete. Although the fees and rates can be reduced, it might also need a significantly higher monthly obligation since you’re still repaying the principal completely. Therefore, enrolling in a debt management program may not be right for everyone, and debt settlement could be considerably better.

Debt Settlement

Debt Settlement involves reaching negotiated settlements with your creditors to acquire significant reductions on the principal amount that you owe. It's the fastest and most aggressive way to get out of debt. You can get rid of as much as 40-60% of your total debt and be out of debt in 1-2 years. For consumers with plenty of unsecured debt (usually greater than $10K) who're unable or only able to make the minimum monthly payment, debt settlement is a viable solution. It will, however, have a negative impact on your credit history. This is contrary to credit counseling, which will not hurt your credit rating and helps you pay down debt responsibly.

Next Steps:

To start off, the best and easiest action to take would be to first contact a legitimate debt counseling company and get a free consultation to talk about your expenses and determine the most effective solution customized for your situation.