Credit Card Debt Settlement A Flexible Option For Debt Reduction

Credit Card Debt Settlement A Flexible Option for Debt Reduction

by

Mark F Funt

If you feel that bankruptcy is inevitable for you, then you need to think again because you can easily settle credit card debt through credit card debt settlement. This method is by far the quickest way to settle your credit card debt without the need for filing for bankruptcy. This method is a quick debt settlement process since you can usually clear your debt with your creditor in what is called a one-off payment. This method works out to be better than budgeting or debt consolidation, since debt reduction can be obtained in a faster way by this method.

To enumerate the process, it is necessary to understand that budgeting can take several years to clear your debt, since budgeting involves paying the creditor much more than the minimum repayment. In most cases, it has been documented that such repayment takes at least seven years to clear the debt. Even if the debtor pays more than the minimum payment per month, the time taken to pay off the entire loan will still run into seven years.

In the case of debt consolidation, the interest on the debt is reduced. This simply means that debt remains the same. Although this method is faster than budgeting, the debt consolidation usually runs into a few years (say around two) before the debt is finally settled. However, this is not the case with the case of credit card debt settlement, which usually settles the entire debt within a shorter timeframe of around one to one and a half years. This method can settle the debt even more quickly and in some instances, the debtor can repay the debt in a shorter timeframe.

The settlement process usually requires the debtor to abide by some tough regulations. The debtor needs to acquire approximately 50% of the debt balance within a short period. If not, the debt settlement process usually winds up and ends in a failure. Some of the other downsides include reduced credit rating, possible law suits, and even tax liabilities for the sums that have been reduced.

The credit card debt settlement process requires the debtor to sign up with a debt relief company. The debtors then stop paying their individual creditors and pay this money into a specially designated bank account. Once there is enough money credited in the bank account, the settlement organization starts negotiating with the credit company to seek a reduction in the debt amount. This figure is usually between 50% and 60% of the original amount.

Mark Funt Stuart Whitworth and Serena Childress, with the single focus of providing a truly consultative solution to consumers struggling with financial hardships,

United Financial Relief

is an energetic, smart and compassionate company with most importantly a dedication to empower people with the knowledge and the tools to improve their financial well-being.

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ArticleRich.com