Settling Credit Card Debt To Eliminate Credit Card Debt Quickly

If you have large debts, and are thinking about settling credit card debt, bankruptcy is not inevitable. Indeed, there is another option; credit card debt settlement.

Credit card debt settlement is by far the quickest way to settle their credit card debt, without pursuing the bankruptcy option. Credit card debt settlement is really quick because it results in a one off settlement with your creditors, usually within a period a twelve months or so.

Credit card debt settlement is really fast, especially when compared with credit card debt consolidation and budgeting.

For instance, budgeting usually take’s several years to completely reduce the debt. This is because with budgeting, the debtor is simply paying off the debt with no change in the debt payment structure. Consequently, unless the debtor pays off a significantly larger amount than the minimum payments per month on the complete range of their credit cards, the turnaround time will still run to a timescale of a few years, often as much as three, four or even five years.

If we take a look at credit card debt consolidation, it simply reduces the interest on the credit cards, so the debt remains the same. Because it restructures the interest on the loans, at least it makes for a faster turnaround time than budgeting. With credit card debt consolidation, it usually runs into two or more years, before the debt is completely cleared.

When we compare this to credit card debt settlement, it results in settling up of credit card debt, 9 to 18 months, and even more quickly in some instances if the debtor can come up with a one of settlement within a shorter time frame.

Credit Card Debt Settlement The Key

Credit card debt settlement requires that the debtor sign up with a credit card debt relief organization. The debtor then stops paying their individual credit cards; instead they pay this money into a special bank account instead. Once the account builds up, the debt settlement company begins negotiating with the creditors and seeks a reduction in the debt. The negotiated credit card debt settlement figure tends to be in and around 50 to 60% of the original figure.

While on the face of it, debt settlement sounds like an easy credit card debt settlement option, because it reduces so much debt, and it manages to do this within a very short time frame of 12 months or so. However, it does have some challenging conditions. Basically, unless the debtor can acquire approximately 50% of the debt balance within a about a year, the settlement process will end up going nowhere.

Also, there are important consequences to consider, for anyone who is interested, in reducing credit card debt with this type of program, such as a downgrading of the debtors credit score, possible law suits and more than likely a tax liability on the money which they have cleared from their debt principle.

There are Other Debt Reduction Strategies. Why
Choose a Program on Settling Credit Card Debt?

While credit card debt settlement has some downsides, it does work very well for credit card debtors who have large debts. Bankruptcy is a popular option for debtors with large debts; however, bankruptcy has a lot of downsides anyway. These downsides include the downgrading of the credit rating anywhere from 8 to 10 years, the fire sale of assets and a public record of their bankruptcy. In summary, bankruptcy has more downsides than credit card debt settlement.

With debt settlement, the debtor is also interested in settling credit card debt very quickly, but, with debt settlement the debtor does not have their credit score badly affected for very long time. Also, the debtor may well sell off some assets. However, unlike bankruptcy, they have about a year or so to complete the process, and they are in charge of this process whereas with bankruptcy the bankruptcy trustee is in control. Consequently with credit card debt settlement there is no need to fire sale their assets.

If you have been thinking about settling credit card debt quickly, and do not like the idea of filing for bankruptcy, then credit card debt settlement could be the better option for you. Certainly it is worthwhile seriously considering the debt settlement option, before filing for bankruptcy program.