The Growing Need For Debt Counseling
There are several reasons why the number of people taking debt counseling is seeing an unprecedented growth. Some of the reasons are growing tuition fees in the case of students, increased gas prices and bankruptcy reforms. There are several other reasons too why an increased number of people are falling into debt. If you’re in debt and think you need help, this article will give you an idea of the options and choices you have open to you in terms of debt counseling.
There are over $13 trillion out there in consumer debt. Of these 13 trillion dollars, 2 trillion are revolving. As soon as the interest rate rises, the revolving debt affects the consumer. 2 trillion dollars worth of mortgage debt that is grounded on adjustable rate mortgages are estimated to readjust during the next two years. This will lead to a 50 million dollar increase in American consumer interest fees. All this means that your financial burden will rise and that there are a lot of people who’d need to get help in the form of debt counseling.
There is a host of different debt counseling programs. Typical debt counseling would include decreased interest rates coupled with lowered monthly repayments. On the other hand, you could also get a more aggressive debt counseling service that would attempt to get your principal and interest both reduced. The first step you should take is to do a thorough analysis of your payment capabilities since the kind of credit counseling you’d take up would depend on this. You should go in for credit counseling if you can afford more than 2.5% of your total debt in one monthly payment. If it’s 1.5% that you can afford then seek the services of a debt settlement or debt negotiation firm. If you cannot afford any amount of repayment, then you should look at filing for bankruptcy.
What you’d need to be very clear about is whether savings is more important to you or your credit rating. Debt settlement is the answer for you if all you want is to save as much money as possible while getting yourself out of debt. If you’re looking to take on another loan in the near future, then you’d need to work on your credit rating, in which case debt consolidation would be the answer for you.
Of course, no one firm of type of debt counseling service will help everyone. It is essential that you identify your financial situation and your needs in order to find the right service to make the best of what you have.
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Debt negotiation appears to be increasing as a viable strategy for consumers dealing with credit card debt. I’ve been tracking the trend rather closely and it is more and more difficult to tell what is delivered for your money. It is obvious that there are a number of service providers in the market that offer outstanding debt solutions and the customers really benefit, but I am also aware there are tons of debt service providers available today that are focused on collecting new customer fees and bringing in new clients. This is why there is brand new government regulation in the debt industry. My sister in law worked with a debt negotiation company and is very happy happy with the result.
Comment by Alyssa Florance — July 7, 2010 @ 5:18 am