2 Ways to Eliminate Unsecured Debt

Tens of thousands of consumers are being affected by credit card debt during these uncertain economic times. The U.S. will, as always, rebound from these hard times soon enough. However, the strains of debt on those who are having a hard time making ends meet can weigh strong on the minds of many. Unfortunately, for many, Getting rid of unsecured debt with as little personal financial damage as possible is the only way to survive these hard times.

How can this be done?

Today, many people need debt relief. The vast majority of debt can be eliminated in two ways. There are advantages and disadvantages to both and personal circumstances will determine which is right for any particular individual. The blame for these personal circumstances can be pointed in many directions. Many make the argument that the state of the economy in recession is to blame for the scenario. Some make the argument that the credit card issuers share much of the blame for the rise in credit card debt today. And then there are the consumers themselves who should consider that their debt issues are their own fault above any other excuse. In any case, many are looking for solutions to the problem.

Two of the most widely used ways of unsecured debt settlement are available to consumers today. One of the most widely known debt relief programs is bankruptcy. Bankruptcy is heavily advertised when the economy is strong or weak, however, bankruptcy carries many serious side-effects and should only be considered as a last resort when dealing with credit card debt. A few of the consequences of filing bankruptcy are: the virtual destruction of one’s credit record, the near inability to obtain future credit for up to 10 years, denial of apartment or home rentals because of the bankruptcy, being required to pay deposits for future home utilities such as gas, electricity, water, home phone, internet and cable TV, finally, the embarrassing possibility of being rejected for a job or promotion, as more and more employers these days are conducting credit checks as part of their routine job applicant screening process.

A less intrusive form of debt relief is debt settlement. This is arguably the most effective debt relief program in existence today. Under a debt settlement approach, the consumers credit debt balances are negotiated for reduction by a firm on behalf of the consumer. Using a debt settlement program, consumers can expect to receive debt reductions of 50% at a minimum, and as high as 75% reductions in credit card debt. Debt settlement is much easier on your credit ratings and does not carry the stigma or repercussions of bankruptcy. Of the two a negotiated debt settlement is the winner over bankruptcy almost every time.