Consumer debt in America is now spiraling out of control. Last year it was reported that American credit card debt was close to $800 billion and overall consumer debt was over 2 1/2 trillion dollars. Considering that the average American makes close to $35,000 a year and when you divide it up the average debt at the end of 2011 was $16,000 a person. It’s obvious that the American consumer is walking on egg shells especially in these unstable economic conditions. Many people that have overindulged financially are now living under the plan of robbing Peter to pay Paul. Just keep those credit cards open to kick the can down the road another month.
Some of the smart ones have begun looking into ways to eliminate debt. Basically, for the average consumer they have two choices to become debt free, it’s either debt settlement or filing bankruptcy. For many, filing bankruptcy might not be an option if there is not enough debt. Someone wouldn’t want to file for bankruptcy to wipe out $5000 in credit card debt, because it would be foolish. Why throw down the gauntlet for a few thousand dollars when you can settle the debt using a debt settlement company. In many cases, filing Chapter 7 bankruptcy can make you debt free or at least close to it. But it’s better to save that card for a time when you really need it. Bankruptcy is better for someone that has a pile of unpayable medical bills and a stack of credit card bills that they wouldn’t be able to pay off in their lifetime. Since a bankruptcy filing puts a ding on your credit and you can only do it every 8 years, it’s better to save it for severe financial problems.
For someone that’s a candidate for debt settlement they should begin looking online for companies that are members of the Better Business Bureau or other accredited organizations. This will make sure that there is some kind of recourse if something happens during the process. Also, most companies listed in one of these agencies have many reviews of satisfied and or unhappy customers that shed some light on the way they do business. An individual will want to hire a debt settlement company that is trustworthy as they will be giving them a substantial amount of money to negotiate a settlement with their creditors. Anyone considering debt settlement should not rush in to hiring a debt settlement company. They should weigh all their options including speaking with a bankruptcy attorney. A bankruptcy attorney can sometimes tell an individual the direction to go to put them on the road to becoming debt-free.