Ways to Eliminate Credit Card Debts

As we all know too well, consumers within the United States of America have developed a serious addiction to credit card debts, and things have only gotten worse in recent years. Credit card debt has become a national crisis – an accompaniment and spur to the foreclosure boom and bank failures – yet most of our citizens have no real idea on how to change things around. As the economy continues to fall apart, we have no choice but to try and tackle the problem head on with all due diligence in efforts to repair credit card debts before they fully strangle whatever opportunities may come our way. There are professional options available, of course, but all of these come with their own sets of troubles. Most of the debt elimination theoretical solutions hawked through media advertisements could actually be considered destructive to household economies. With a national recession looming over the horizon, it is the responsibility of every citizen to deal with their own personal debt loads no matter how tempting the alternatives can sound. Remember, most consumers only learn about the benefits of debt relief programs from commercials and other advertisements that have little reason to elaborate all of the many disadvantages they may contain. Reducing or eliminating credit card debts should be taken seriously, but consumers should try to avoid the help of external professionals for as long as they can.

As attractive as handing over their problems to supposed authorities may seem in the abstract, one could argue that this is precisely the sort of thinking that led us to this lending crisis in the first place. We blindly believed that the banking community knew what they were doing, and 債務重組計劃 that certainly didn’t turn out that well. This is not to say that all such counselors are not to be trusted, but, as with any ambitious and experienced group of professionals, they do tend to at times to overly profess the wonders of their particular specialty (that is, after all, how they make their living) and often to the borrowers’ detriment. After you have taken the time to fully analyze your own finances and personally tried every sort of credit card debt relief technique, you may indeed realize that one of the economic services may be necessary to pull yourself out of the mires of debt burden. However, you should only succumb to such a plan once you have made certain that you have done everything you can on your own initiative.

You are probably familiar with the Chapter 7 bankruptcy protection, we assume, but what you might not understand is how dramatically 2005 legislation has altered the US bankruptcy code. It’s much more difficult to declare bankruptcy these days, and most people who still maintain the income or savings to afford bankruptcy attorneys (ever more expensive as more and more borrowers find need of their services) would not even be admitted into the program. Yes, qualifications for the Chapter 7 debt elimination bankruptcy program newly depends upon not merely the debts that individuals or families have amassed but also their gross earnings relative to the average of their state of residence. Furthermore, after the congressional alterations of the code, even those supposedly lucky borrowers that have been allowed to enter the bankruptcy program must now face potential seizure of their property based upon each item’s replacement (as opposed to, in previous years, resale) value. In simple terms, this means that every applicant for Chapter 7 bankruptcy will have to gird themselves against the very real possibility that a lifetime’s possessions will be taken away by the courts for auction to repay the accumulated creditors.

If borrowers fail to be accepted into the Chapter 7 debt elimination bankruptcy, the courts will instead place them into the Chapter 13 debt restructuring program. The Chapter 13 program should, inevitably, force consumers to confront and diminish their credit card debt load, but it does so through a rigorous process of court mandated budgeting. Once debtors have been told that they will not be able to enter the Chapter 7 program (well after they have spent hundreds of dollars on application fees and potentially thousands, depending upon the specific scenario, on bankruptcy attorneys), the governmental trustee will assess their living condition and income – both based upon records from six months prior. These calculations are then compared to the averages of the filer’s state of residence for the past year, and the courts will set down a budget based upon Internal Revenue Service specifications. The following payment structure can, especially for those debtors that live in an area of their state with higher than average costs of living, force borrowers to take their children out of private or religious schools, move locations, and even sell off as many of their possessions as would have been taken forcibly through the Chapter 7 process. All of this, remember, with little to no initial reduction of their overall balances. It’s an extremely treacherous road that has ruined the lives of too many decent Americans that did not fully understand just how bankruptcy protection has been changed in this country and listened too blindly to the advice of their attorneys.

Unfortunately, the limited degree to which borrower do recognize the horrors of modern bankruptcy protection has largely occurred because these borrowers were convinced by Consumer Credit Counselors or similar firms of suspicious motives. While every debt relief company has seen their business expand during the current economic crises, the exponential growth of the Consumer Credit Counseling industry after the changes in bankruptcy law cannot be entirely coincidental. In essence, Consumer Credit Counseling seeks to do the same thing as the Chapter 13 program – just less effectively with much greater costs and roughly the same catastrophic effects upon the borrower’s credit rating – by taking on the borrowers’ assorted credit card bills as their own. To be clear, though interest rates will be vaguely lowered and some fees perhaps taken off balances (and, since the debts will be extended, payments shall obviously be lowered as well), the Consumer Credit Counseling industry has virtually no beneficial effects that borrowers could not create by their own efforts without resorting to high priced alternatives. After all, the essence of Consumer Credit Counseling relies upon purely paying back existing loans. Perhaps, doing this of their own initiative may be more difficult, but, if you are primarily using the Consumer Credit Counseling firm for motivation, there have to be less c