Debt Settlement Negotiation Vs. Credit Counseling - Which Is The Best Debt Relief Option?

Online, July 27, 2010 (Newswire.com) - Coming off one of the worst recessions in United States history there are more Americans deeply in credit card debt than ever before. Many are on the verge of bankruptcy and can barely afford their minimum monthly payments. Bankruptcy would have been the logical decision in the past for these debt ridden consumers however new bankruptcy laws make this process much more difficult to qualify for. As a result consumers are resorting to other debt relief tactics including debt settlement negotiation, debt consolidation, and credit counseling.

Credit counseling makes financial sense for consumers who have high interest credit cards and would like to get a lower rate. Credit counseling programs negotiate the interest rates on your credit cards and make a payment plan to repay the balance over a period of 4-9 years. Credit counseling makes financial sense if the consumer is able to comfortably meet their minimum monthly payments. If however they run into financial trouble and miss a couple payments to the program, they are likely to be kicked out and in worse financial shape than before. So if consumers are confident they will be able to pay throughout the program then credit counseling can be a great way to significantly reduce credit card debt interest overtime.

Another option is debt settlement negotiation . Credit card companies are in business to take your money. They make money off your money however what happens you can't pay them back? Well if you file bankruptcy the credit card company would likely get nothing. Creditors of unsecured debt are the last ones in line to get their money back. Knowing this credit card companies are looking for other ways to collect on their debt. One of these collection tactics in known as credit card debt settlement.

Debt settlement negotiation is a legitimate way to avoid bankruptcy. Instead of making payments to the credit card company the consumer will make payments into a savings account until enough funds are built up to settle the debt balance. Typically the credit card company will settle the debt for 50% of the balance if they believe they are a legitimate candidate for bankruptcy.

A customer can utilize this attitude to their advantage. A customer will need to convince their creditor that the recent economic crisis has left them unable to meet their obligations. If a customer has missed about 4 to 6 payments the plea becomes more convincing. Also if the debtor is accompanied by a debt settlement company the credit card companies will take them more seriously. A good credit card debt settlement can get a customer a debt elimination of about 40% to 60% of the total unsecured debt.

Credit card companies and other creditors of unsecured debt are willing to make deals. They are worried of the increasing amount of bankruptcy filings and would rather collect 50% of their money rather than nothing. Consumers that are experiencing a legitimate financial hardship and have at least $10k in unsecured debt will qualify for most legitimate debt settlement programs . Not all programs are legitimate however which is why it would be wise to speak with a debt relief specialist who will go over all your options.

To speak with a debt relief specialist for a free consultation check out the following link:

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Or Call: - 877-853-6466