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July 8th, 2008 |

Author: Gavin

Debt Relief Options – Limitations on Consumer Debt Relief

Debt relief options are the most sought after financial help by the consumers. The consumers are now desperate to get some help to eliminate at least a part of their unsecured loan and if possible, they want to wipe out the whole unsecured debt. This is because of the fact that the American economy has been hit by recession and thousands of people lost their jobs and are now facing financial hardship.

They have failed to repay their creditors and have become defaulters. This has resulted in the loss of credit score and credibility. The increased pressure from the creditors in form of collection calls have forced several consumers to file for bankruptcy. This has worsened the financial situation of the consumers as bankruptcy filing means complete loss of credibility for 7-10 years because, the report of bankruptcy filing continues to show up on the credit history for that period of time.

It is because of this reason that the consumers are now looking for debt relief options. There are several limitations on consumer debt relief. Relief measures will not wipe out the entire debt of the consumers and in several relief options, the consumers will be required to pay off the entire amount of the loan to the creditors. The only thing that comes up as an advantage for those relief options is that the time frame for repayment may be increased and the interest rate that is charged by the creditors will be reduced.

There is only one relief option where the unsecured loan of the consumer will get eliminated by at least 50% and a maximum of up to 70%. This method is none other than method of debt settlement. This method too has some severe limitations. The first limitation being that the minimum amount of debt that a consumer must have is $10k. Anything below that amount will not be entertained.

The next limitation is that the debt needs to be consolidated in one place or else, it will increase the cost of negotiation. Yet another limitation is that the consumer is supposed to repay the remaining amount of the debt to the creditor in one single payment. This might be a severe problem for many consumers because of the financial hardship that they are facing.

The final and the biggest limitation of settlement as one of the debt relief options is that of finding a legitimate debt settlement company. This is because of the fact that the settlement industry is full of shady and fraud companies which will take upfront fees from the consumers and will then come up and say that the negotiation with the creditor failed. If this happens, the consumers lose!
Debt settlement is a legitimate alternative to filing for bankruptcy. There are also other debt relief options available which is why it would be wise to speak with a debt relief specialist.

About the Author

www.CreditCardDebtFighters.com is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.
http://www.CreditCardDebtFighters.com