Debt Relief Companies » Unsecured Credit Card Debt

How Can I Do Credit Card Debt Consolidation?

Scott — Fri, 21 Sep 2007 16:54:40 +0000

Credit card debt consolidation really only means taking your bills and combining them into one monthly payment and there are several ways to do this. Typically the phrase applies to your unsecured credit card debt and sometimes even your mortgage, not utility bills and car payments. It is a term that gets over used in marketing pitches from all types of financial companies often making it seem more complicated than it is.

Generally, what’s important is that credit card debt consolidation:

1. Can make your life simpler by allowing you to combine several debts into one payment

2. It can be done several different ways depending on your situation

3. It can be done by several different types of companies

4. Its goal is to try and reduce your overall monthly payment

The first thing to determine is the type of debt solution you need and what you qualify for:

1. Do you own a home with equity that can be used to consolidate your bills by taking out another mortgage? – Yes? Then you may be able to refinance your mortgage and use that money to pay off your credit card bills so you are left with one home payment.

2. Are you in need of a little help with your bills but not in a dire financial situation? – Take a look at a debt management consolidation plan

3. Are you swamped in bills, falling behind fast and want to avoid bankruptcy? – Consider using a debt settlement consolidation program

Only you can decide which solution is best for you to achieve credit card debt consolidation and there are drawbacks and benefits to each method. What’s most important is to do some research and determine the best solution for you and then find an honest debt help company to assist you. I hope this website will help you get the answers you need.

How Debt Settlement Reduces Unsecured Credit Card Debt

Scott — Mon, 15 Jan 2007 17:00:56 +0000

If you read this article about unsecured debt you will understand that credit cards are promises to repay with nothing to back them up (like a physical asset or other collateral). Because of this, they can be negotiated (like any other promise or contract) should the borrower have trouble living up to thier obligations.

A debt settlement company acts as your negotiation agency and will attempt to reduce the amount of debt that you owe by negotiating with your creditors. There is a standard debt settlement process that you will go through on your way to becoming debt free.

Debt settlement companies can usually get your creditors to legally accept less than you owe them – sometimes up to 65% less but the results vary widely based on which company you use, your income, and your ability to remain on the program set up for you.

Given your inability to repay everything you owe, your creditors are happy to get at least some of their money back on past due accounts so you end of paying less than you originally owed.

What Is Unsecured Credit Card Debt?

Scott — Mon, 15 Jan 2007 16:38:05 +0000

Credit card debt is unsecured debt because nothing you own is used as collateral against that debt. In other words, your creditors do not have the ability to take anything from you if you are unable to repay that debt.

By contrast, if you take out a car loan from the bank, the bank will make you sign papers that give them the ability to take your car from you if you cannot make the monthly car payments. That is a secured debt – it is secured by the car. The bank will sell your car and use the cash to pay themselves back.

Credit card companies cannot take anything from you because there is nothing securing the debt. It will severely damage your credit score and they can sue you if you do not repay it but they cannot take anything away from you without a court order (in which case they may get a judgement against you which might allow them to garnish your wages for repayment).

However, going to court is a long and expensive process for them which is why there are debt relief companies that serve as middlemen and help facilitate a deal between the person in debt and their creditors for unsecured debts.

Generally there are 2 types of debt relief companies for unsecured credit card debts, debt settlement companies and debt management companies.