Heavy Consumer Credit Debt Sends Thousands of Americans To Debt Relief

Consumer credit statistics today tell a tough story and why the search is on for debt relief. The average credit card debt per household is at just under $16,000. The average interest rate is at 14.35% and yet more than six hundred million people sit holding three or more credit cards. Consumers in the United States are over $800 billion in unsecured debt due to credit card use. These statistics are frightening given an economic downturn which won’t seem to right itself quick enough, and many Americans are becoming statistics themselves. According to FICO statistics, only one in twenty consumers have credit histories shorter than two years, and there are an extraordinary number who have obligations on credit cards that are over ten years old. Imagine the interest that has been paid toward all that! The frustration can be overwhelming, and that’s when the search for debt relief starts, and hopefully, it isn’t too late. Several years ago,

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U.S. Bankruptcy laws were changed. It is more difficult than ever before to utilize bankruptcy and qualifying for it is difficult. Even then, it is no longer a process that wipes debt 債務重組 off the board and creates a nice clean financial slate for starting over. Even a home is no longer safe in the process. The result of this difficulty is a heavier use of other debt relief methods such as consolidation and/or restructuring of debt and the consumer may be better off because of these laws because the debt help available today offer better financial solutions. Putting debt consolidation aside because it requires converting unsecured credit card debt into collateral secured long term loans, restructuring through debt settlement or debt management makes far more sense both for the short term and the long term. In both cases, the consumer makes one monthly payment not toward the whole of the debt and its interests. There is a negotiated amount that is agreed to by the creditor, and once that is paid, the account is closed and marked ‘as settled’.

This process takes anywhere from three to five years depending on the amount of balances. This is debt relief which does not require a loan, does not require intense scrutiny of the consumer’s tax returns or other private details, and works faster than any other method. The reason these two programs have such advantages over other debt relief methods is that they actually work toward eliminating a good portion of the consumer credit debt owed. Negotiating with creditors often reduces an amount owed by a huge percentage, and that enables the consumer to pay it off quicker. It is true that a consumer credit rating takes a dive during these processes, but if a person is behind the financial eight ball when beginning a program, chances are their credit rating is already damaged. It is also worth mentioning that a credit rating is ruined for ten years with bankruptcy, and with debt consolidation, there’s the danger of making late payments which will also reflect badly. For those who set a debt management or debt settlement goal and stick with it, they find they can complete it and kick start their credit rating though the use of pre-paid credit cards and more local type accounts.

There has been so much talk about federal grants for debt relief that it’s almost possible to believe that they might actually exist. Certainly, if you’re in financial trouble, it’s easy to understand why you might want them to exist. Unfortunately, taking the people who offer to help you apply up on their proposal is probably only going to make things worse, because no such things exist.

That much has been confirmed by government reports. Let’s repeat that just to be certain- there are no such things as federal grants aimed at personal debt relief. There is funding to get mothers into education, to stimulate economic growth and even to allow you to restructure debts, but there is none that will simply let you write them off.

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