subject: Credit Card Debt Relief Decisions [print this page] There is surely no shortage of consumers who are currently exploring their credit card debt relief options, particularly in this difficult post-recession economy. The financial hardships that have emerged in the wake of ravaged home values, high unemployment and underemployment, tight lending guidelines and the rising cost of living forced millions of consumers to turn to the only source of funds that was still available to them: their credit cards. Now this credit card debt has come home to roost as the interest rates being charged commonly attain levels of 18% and up, leaving many cash-strapped borrowers with no choice other than to make just the minimum monthly payments on their accounts. Any of these borrowers who has used one of the debt calculators available on the internet has probably discovered that their prospects for repaying this high-interest debt using minimum payments are very bleak, as the terms required to become debt-free can easily extend for decades.
This is an unthinkable prospect to ponder in any economy, even in a strong one. But in the present one it is flat-out mandatory that consumers who are affected in this way find appropriate solutions to their debt problems. The debt relief options from which consumers can choose are credit counseling, debt settlement and bankruptcy. Of these three debt relief options, credit counseling holds the most promise for all but the most impossible of debt situations. Unlike debt settlement and bankruptcy, there is no credit score damage that will take place with credit counseling. With both debt settlement and bankruptcy the credit damage that will be sustained is so severe that these solutions are difficult to recommend to anyone who has another legitimate option available to them. The best advice is for these consumers to speak with a debt professional and find out if the monthly payments required for credit counseling, which will have the borrower out of debt in 5 years or less as a result of reduced interest rates and other benefits, will be realistic and manageable for them. If it turns out that they are not, then perhaps there is cause to consider either debt settlement, which is a very risky option on many counts, or bankruptcy, which will ruin credit for 7 to 10 years.
