Many consumers today are struggling with credit card debt. Since these cards are widely available, many people make the mistake of taking out several of them and maxing them out without being able to pay them back. It is not uncommon for consumers to be more than $20,000 in credit card debt with interest rates as high as 23%. This can make for very high payments each month that consumers simply will never be able to pay. Rather than declaring bankruptcy, consumers can consider settling the debt. Below is an overview of some advantages of settling credit card debt.
Bankruptcy can be a traumatic process that can make it difficult to get loans in the future. Rather than spending thousands of dollars to declare bankruptcy, consumers can hire a debt settlement company, like Rescue One Financial to guide them through the process of settling their debt. When credit card debts are settled, Rescue One Financial works directly with the credit card company to reduce payments to an amount that the client can afford. If possible, credit card companies would like to avoid the expenses associated with bankruptcy as well.
Maintain the Right to Declare Bankruptcy
Another big advantage of avoiding bankruptcy protection for credit card debt is the ability to exercise the right in the future. Individuals who choose to declare bankruptcy will be unable to do so again for another seven years. In the event that more debt is accumulated, consumers will have no protections available to them for nearly a decade. This could be much more costly than even a higher monthly payment related to credit card debt.
More Affordable Payments
Consumers who settle their credit card debts can usually get more manageable monthly payments that they can afford. This can more than justify the expenses of going through the process since interest rates can be reduced and amounts owed can be cut down. Rather than dealing with wage garnishments or collections agents, consumers can make affordable payments and gradually pay down the debt.
Improved Credit Score
Once the credit card debt has been settled and consumers are able to make their payments on time, their credit scores may gradually improve. Many people struggling with credit card debt have poor credit scores which can make their lives difficult. Consumers can benefit in the long run by making these payments on time and thereby increasing their credit scores. By doing this, consumers can avoid these issues repeating themselves later and can look forward to a bright financial future.
If you’re unsure of where to start, seek help with the experts at Rescue 1 Financial who are always standing by.