Understand all Debt Relief Programs Available!

The point of this website is to help people understand the usefulness of using a debt settlement law firm for their credit card debt woes; however there are other debt relief programs available to consumers and all should be reviewed prior to making a move.

One of the other very common debt relief programs is that of a consumer credit counseling program. This type of plan has its respective pros and cons just like any method of debt relief. The benefits of such a program are usually getting a lower interest rate on the debts owed, also if the debtor is a few months behind on the payments the creditors will waive those penalties and re-age their account putting them back to a current status.

Perhaps the biggest benefit of credit counseling is that the program is set up on a fixed payment schedule, not the monthly minimum payment. This fixed payment schedule allows the debts to get paid off at a much faster rate, typically the entire credit counseling program will range between 4-7 years, depending on the creditors and amount of debt owed.

There are however a few downsides to credit counseling, one is that while there is a reduction in interest there is no actual reduction of the balances themselves. Another problem for many people who want to join credit counseling is that the payments are usually very similar and in some cases even high than what the debtor was paying out in monthly minimum payments. So for such debtors who really cant afford to pay their debts by themselves this may not be the best option.

One more issue with credit counseling is that if a few payments are missed the creditors, not the credit counseling company, will kick the debtor out of the program revoking the benefits such as waiving of penalties and a lower interest. Statistics have shown that credit counseling programs have close to an 80% failure rate!

Another option for debt relief is to obtain a debt consolidation loan. Typically debt consolidation loans require some sort of collateral to be put up against the loan, in many cases equity in a home. This is not a very wise financial move, in essence what someone is doing is transforming their low risk unsecured debt into high risk secured debt. This now places the debtors home at risk should they not be able to make good on the payments.

Statistics have shown than the majority of people within five years of getting a debt consolidation loan end up right back where they were in credit card debt, except now they have an additional secured loan that must be met first, in many cases forcing people into a bankruptcy situation where they would be lucky to keep their home.

With the economy the way it has been the above mentioned options have not really been working for many people, this is one of the reasons that debt settlement has become such a popular debt relief program. When compared to the amount of money and time saved for most folks debt settlement will be the best route.

If you would like to see if a debt settlement law firm has something that can work for you then click here.