Continuing on the same path…
If you stop using credit cards today and are barely
making minimum payments, or falling behind it could take
20 or more years to get debt free. Depending on monthly
payments and interest, some consumers will pay three
times their current balance. In addition, continuing on
the same path will have a negligible effect on your
In the 1970’s American’s had limited options with debt
reduction beyond bankruptcy. In the early 1980’s
Consumer Credit Counseling Services (CCCS) offered
Americans another choice. However, since their inception
many had an affiliation with credit card companies
because banks realized that CCCS could effectively serve
the purpose of a "soft collection agency."
The truth is CCCS programs benefit the credit card
companies by holding consumers into longer than expected
programs, often lasting 5 to 7 years. CCCS companies are
also able to entice consumers with in their programs
under the guise of being a “non-profit” organization.
Many CCCS companies charge hidden fees, sometimes
referred to as donations, which can add up to many
hundreds of dollars over time. Also, they do not
negotiate on the principal balance, so you pay back more
than what is owed.
Many consumers who are suffering from being
over-extended are also looking for immediate cash-flow
relief. CCCS companies do not always offer consumers
cash-flow relief. The result for many is a program that
does not fit a tight budget and often lasts 2-3 years
longer than a typical program at TFF.
Finally, if you enroll with CCCS, their inquiry will be
directly reported to your credit bureaus. When your
credit report is obtained by a prospective lender or
employer it can be determined that you sought out third
Bankruptcy might seem like the easiest solution,
however, it should be the very last resort. Many
consumers who have filed bankruptcy feel a sense of
failure. Bankruptcy remains on a credit report for up to
10 years and will even become public record. In some
communities local newspapers even publish names of
people who recently filed bankruptcy!
Chapter 7 Bankruptcy allows for a complete discharge of
your debt. However, many are not eligible for this type
of bankruptcy, which forces a Chapter 13. In this case,
debts are not discharged, obligating you to a partial
repayment, which could last for up to five years.
Failure to meet the terms and conditions of a Chapter 13
could result in the liquidation of your home and other
assets. This unfortunate decision will have long-term
effects for many years to come. This could hinder your
ability to obtain credit or find a new job depending on
the employer and position applied for.