All it takes is one accident, illness or injury for a New York resident to find his or her wages reduced and his or her credit cards pushed to their limits. The costs of caring for one's self and family can quickly pile up on credit cards, and when the bills start coming due, it can be overwhelming for the card holder to reconcile those payments. This bankruptcy law blog has dedicated a number of prior posts to discussing Chapter 7 bankruptcy and Chapter 13 bankruptcy, the two primary modes of filing for individuals. This post will generally discuss the use of debt settlement agencies to manage and eliminate consumer credit card debt.
One thing to know about debt settlement agencies is that many of them are organized to be for profit. That means that in addition to the payments a person must make toward the repayment of his credit card bills, he or she must also provide a fee to the debt settlement organization for its services. Individuals who look into debt settlement are encouraged to understand those entities fee structures before choosing to pursue the process.
Understanding an entity's fees is a good way to ensure that one's debt settlement group is legitimate. There are an unfortunate number of scams in the debt settlement world that create even more damaging financial situations for individuals facing heavy credit card and loan debts.
Finally, individuals interested in pursuing debt settlement should understand that repayment plan that their chosen entities wish to utilize. Since there is no guarantee that a credit card company will agree to a settlement process, debt settlement entities may employ different strategies with different lenders to attempt to secure negotiated settlements.
Some individuals find financial freedom through debt settlement. Others prefer to pursue other means of starting off on fresh financial footing. Attorneys who work in the bankruptcy and debt relief fields can be great resources for those who have questions about the different processes.