Credit plays a major role in our lives today. Having a good credit rating is now crucial to getting accepted for housing, credit cards, auto loans, and nearly all other types of consumer loans. With that fact in mind, a large percentage of credit card holders are still careless about paying their monthly debt obligations on time or paying off their loans altogether. The result is an escalating amount of credit card debt among Americans and an increased demand for credit card debt settlement professionals as a solution to the problem.
Credit card holders who continually fail to meet their credit card obligations are forced to explore various debt consolidation and debt relief options. Credit card debt settlement programs have become a popular remedy to help reduce the amount owed and eliminate debt altogether. Credit card debt settlement generally involves negotiation between a debtor and a creditor and results in an agreement as to how the debtor will repay his or her credit card debt. Once the debtor proves that he or she cannot meet his or her debt obligations, the credit card debt settlement professional will help reduce the financial burden on the debtor by decreasing the amount to be paid to satisfy the debt. Although credit card debt settlement results in discounted terms on your loan, it is a solution that is extremely detrimental to your credit score. One should only resort to credit card debt settlement in very severe situations or to avoid the alternative option of filing for bankruptcy.
Collection agencies generally authorize credit card debt settlements to debtors when they have reason to believe that discounted payment terms on the debt will be of better interest to them that receiving no payment whatsoever from debtors forced to file for bankruptcy. Although individuals can go about the debt settlement process on their own, it is recommended to work side by side with a debt settlement professional to receive better results. Debt settlement professionals are familiar with the right procedures and related laws and, therefore, will be more effective at negotiating with creditors to get reasonable repayment terms for their clients. Debt settlement agencies can generally get as much as 50% of the debt wiped out in the repayment agreement. Another important reason that we recommend working with a debt settlement professional is to prevent fraudulent activities. Creditors may attempt to mislead debtors by providing wrong information and so working with a debt settlement professional will ensure that the right procedures are taken and legal boundaries are respected. The credit card debt settlement process usually takes anywhere from three to nine months before your debt can be settled with new repayment terms. Terms and conditions also vary by state and type of debt, especially relating to the amount of time that needs to pass before your outstanding debt can be wiped off of your credit record. Seven years is the average amount of time that needs to pass before your debt can be wiped off your credit report. Be sure to check the statue of limitations applicable in your state to find out how long the repayment period is before a debt is classified as an uncollectible debt. Finally, keep in mind that credit card debt settlement has a very negative effect on your credit score and it can take seven or more years to get your credit score back up to an acceptable level.