Online Consumer Credit Counseling Programs Fail All The Time

Posted in Credit, Debt, Finance on March 18th, 2008

We here in America are on the brink of experiencing a credit epidemic. The quantity of unsecured debt has hit an all time high and we are approaching what may be a recession. This is leaving a plethora debtors with less money in there pockets and more bills that they have to pay on. In this article I will review the ups and downs of the diverse available systems of credit card debt relief.

Online Consumer Credit Counseling Programs:

Pros- Consolidate monthly payments, lower APR, fixed payment not minimum payment.

Cons- Long term repayment, not easy program to maintain, most do not graduate program, obtaining a mortgage on the program is almost impossible, usually payments are close to what minimums were before joining, one missed payment can result in being kicked off program.

Bankruptcy:

Pros- A full discharge of debts owed if you qualify for a Chapter 7, avoid collection calls.

Cons- Very bad effect on future credit, lifelong public record, change in bankruptcy law made Chapter 7 very hard to qualify for, court ordered repayment process.

Credit Debt Settlement :

Pros- Great savings on debt amount owed, fastest way to get out of debt, private issue and is never made public.

Cons- Short term negative effect on credit score, dealing with collectors, possibility of lawsuit.

All of the above methods do have their respective pros and cons. However what really determines which method is proper for you really depend on the current financial predicament that you are in. For individuals stuck deep in debt but have money to pay a portion of it off then debt settlement would be the correct choice, to help avoid bankruptcy. Those who have lower debt amounts and have no issue making the monthly minimums plus more, than credit counseling is better. However there are some people out there who have literally no choice but to go into a bankruptcy proceeding.