Debt Settlement Companies

Written by Jill Morrison
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Debt settlement companies provide effective solutions for those who are overwhelmed with bad debt. Debt is an increasingly common problem among Americans. In fact, U.S. Census Bureau studies have shown that debt averages have nearly doubled in the past decade. Debt can be accumulated through a number of sources, including loans, medical bills, lawsuits, collections, utility bills, and autos in repossession. The most common type by far is credit card debt.

Credit Card Debt Solutions

Credit card debt has become so common that it now averages at about $8,500 per household. The average family pays about $1,100 each year on credit card interest charges alone. Credit card debt can happen quickly and typically becomes a problem before it is even realized. To make matters worse, credit card companies have taken advantage of American tendencies to fall into debt by providing continuous credit card offers to individuals. Self restraint and budget planning are great tools for avoiding credit card debt troubles in the future.

Those who are already plagued with credit card debt have a few options for solutions to choose from. In mild cases, many will transfer debt balances to zero or low interest credit cards. Then, debt can be paid off without worrying about the effects of treacherous interest charges. Those who choose this method should make sure that they can pay off their debts quickly. Zero or low interest offers on credit cards do not usually last more than eight months. If debt cannot be paid off in this time, more extreme debt reduction methods may be considered.

Debt Consolidation Information

Debt consolidation is a great strategy when trying to pay off large amounts of debt. The process is used to combine all debts into one total. At that point, individuals can choose to pay off debts on their own or with the help of debt reduction services. Counselors are available to provide advice and help individuals to learn about their options. Talking to counselors about debt problems can be very helpful financially and emotionally.

After debts have been consolidated, many will choose to get help from outside services for reducing debt. Debt consolidation loans are a popular option because they can be used to reduce interest charges, pay-off times, and any fees or charges that have been accumulated. However, there are a few major drawbacks associated with these loans. They may contribute to bad debt in some cases because they do not reduce debt totals. Debt consolidation loans are also dangerous because they are usually taken in the form of home equity loans, so individuals could risk losing their homes if payments are not made on time. Debt settlements are a better option after debts have been consolidated.

Benefits of Debt Settlements

Debt settlements are widely known as the most effective option for reducing large amounts of debt in short amounts of time. Debt settlements have many advantages that cannot be seen with debt consolidation loans, bankruptcy, or other financial options. The process begins with consolidating debts into one total amount. Then, debt settlement companies will negotiate with financial institutions and creditors for reduced totals. Some companies may be able to reduce totals by as much as 60 percent.

Debt settlements are advantageous in other ways as well. They can help individuals to drastically reduce or even eliminate interest rates. Debt settlements can also be used to eliminate charges that have been accrued and to reduce pay-off times by up to 70 percent. When the debt settlement process begins, many are pleased to find that harassment from creditors, attorneys, and collection agencies also cease. Finally, settling debt issues can help to relieve the stress and anxiety that may be caused by debt problems.

Unsecured forms of debt can be settled by these companies, including debt from credit cards, loans, personal lines of credit, medical bills, repossessed autos, and collections. Debt settlement companies will not handle secure debts such as from lawsuits, auto loans, student loans, government loans, the IRS, or utility bills. Those who are ready to eliminate their unsecured debts should definitely consider using debt settlement companies for assistance.

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