subject: Credit Card Debt Relief – What Every American Needs To Know About Debt Relief [print this page] While we should all applaud the ever increasing interest in credit card debt relief seen among United States consumers suffering under the weight of loans that appear impossible to repay, the massive popular shift toward solutions like settlement has brought along a host of rumors and innuendo. For instance, one of the main motivations leading Americans to first consider credit card debt relief, according to industry studies, has been a reluctance among consumers to threaten their credit ratings through Chapter 7 debt elimination bankruptcy. Not to mince words, there's nothing quite as harsh as the mark of bankruptcy protection upon FICO credit score numbers, but a notation shared among the three primary credit bureaus of an agreed upon system of credit card debt elimination will inescapably reduce the scores of the borrowers. Sadly, any significant form of relief - beyond, we should say, the slow and steady repayment of financial burdens through traditional payment patterns - shall have similar consequences for credit ratings.
When examining settlement negotiation and the other useful avenues of credit card debt relief, the borrowers' questions should ignore what happens to the credit scores within the first few months of any given program. Instead, you'll want to study the credit histories of men and women that succeeded in their debt reduction plans and see how their credit has improved after the unwanted debt obligations have been torn down. After all, as bills become harder to pay and the mountains of credit card debt grow and grow - even if you've stopped purchasing or if the accounts have been closed, compound interest will continue to escalate ever more ominously - it's just a matter of time before the first lapsed payments leads to a full default and a black mark upon your credit reports that could take a decade to restore.
In terms of the specific damage done to credit ratings, much will depend upon the definitive strategy laid down by whichever credit card debt relief company you've chosen. Some of the firms mandate that every single client, once they've agreed to the plan and signed on for formal assistance, just stop paying back their lenders (while instead sending checks to the settlement firm to be held in a proxy account) and indeed halt all communications with the credit card debt providers. While this tactic has inarguably won past success under certain circumstances, the banks have learned that a cessation of payments followed by an attempt at credit card debt relief should be met with even greater resistance.
Even more potentially damaging, the money sent to credit debt elimination companies and supposedly safeguarded will not be protected under the Federal Deposit Insurance Corporation. In other words, the thousands of dollars sent to a credit card debt relief account might be lost if the company itself goes into bankruptcy or, worse, absconds with the money. Just a bit of searching over the internet as well as a call to the Federal Trade Commission should prevent borrowers from signing on with a credit card debt relief company on shaky financial footing - much less an out and out criminal enterprise - but the slightest possibility should well trouble the brows of heads of household already leaving so much of their financial future to the hands of a company they've likely never heard of before a few months prior. Credit card debt relief demands a gesture of good faith, to put so much of one's fate within the hands of others, but that doesn't mean you should ever allow yourself to be entirely removed from the process.
Credit Card Debt Relief What Every American Needs To Know About Debt Relief
