Personal Debt Management

Millions of Americans are in credit card, loan and short term debt. So much debt, that often these consumers are unable to pay their minimum monthly charges. To meet this demand, there are a plethora of companies which offer services to help the consumer manage and eliminate their debt. However, these companies and their services may do more harm than good.

Let's say you are in debt to three credit card companies for a total of $14,000.00 with monthly minimum payments of more than 750.00. With your current income, there is no way you can meet those minimums and still pay your other bills.

On late night televison, a company advertises that they can "reduce your debt by 45, 50 even 70%. Further, they can get you out of credit card debt in less than one or two years" It sounds great doesn't it?

However, these companies may cause more harm than good to your overall finances.

Often the plan for these companies is to bully and strong-arm your credit card companies into accepting a negotiated settlement for your total debt. After a time of non-payments, the credit card company may accept the offer, but not without marking your credit report with very negative action.

Negotiated settlements, or account closed/settled are one of the worst marks a consumer can have on their credit report. It will take years to remove the mark and return your credit score to a level which will allow you to get a lower interest rate on your home, car loan or new credit card.

A better solution is to eliminate the service company described above and do the legwork yourself.

First, contact your credit card company, tell them your circumstances and financial situation. Offer an amount you can realistically pay every month for your account. Make a series of future payment arrangements for the next year and stick to them.

You can reduce your debt, but it is in your best interest to make the arrangements with your creditors yourself.

Ready to start the new year and get out of debt? Come to my website Get out of debt and learn how you too can finally get out of debt!

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