Many people wonder how much credit card debt is too much? Debt is a serious problem for many families and when you find yourself buried in credit card debt, you may find yourself asking what the proper amount of debt is. There are many factors that can determine this and you will want to consider several things before you start working to pay off your debt.
How much is too much? This is important for several reasons, but first let’s talk about the two most common methods used by credit card companies to collect debt. These two methods are debt settlement and bankruptcy.
Credit card companies have gotten rather good at finding ways to charge as much as they can on credit card bills, so you may feel pretty screwed up right now. They’ve got the best of intentions, but in reality they tend to raise rates if they think there’s a chance of getting some type of debt reduction from you.
This is where debt settlement comes in. Many people are shocked when they learn that the debt relief industry was in place before the credit card companies and have been making a lot of money off of people who are in debt.
The credit card companies see that debt settlement was available for many years before they came out with all of their own debt relief methods, and now that the competition has been established, they’ve come up with ways to make the process as difficult as possible. The average credit card holder today has a 30% chance of avoiding having to file for bankruptcy.
A few years ago, debt settlement would be expensive for most people. This was because most people would need to hire a company to represent them and a lot of money would have to be spent to pay those companies. With today’s low interest rates and fewer companies involved, debt settlement is more affordable than ever.
While it is important that you do some research to find out the total cost of debt settlement and what the savings could be for you, one other thing to keep in mind is how much credit card debt is too much. There are many benefits to filing for bankruptcy over hiring a debt settlement company or working with an attorney.
A bankruptcy is one of the fastest ways to eliminate your credit card debt, and it will remove the legal headache from your life. This is not something that should be done lightly, and you should always consult with an attorney before you decide to go this route.
The fact of the matter is that there are hundreds of thousands of people who have been able to get rid of their credit card debt and they will tell you that they didn’t have to hire an attorney. You are able to find attorneys online and they can help you with the paperwork needed to get rid of debt, but if you have the time and money it is generally recommended that you do it on your own.
Even though most settlement companies will want to work on a commission basis, this doesn’t mean that they are greedy. It is true that they make a percentage of your settlement, but it is still much better than just paying the money and not getting anything in return.
Bankruptcy can be extremely difficult to go through and you can often times find yourself spending a great deal of money just to get started. When you consider that this is going to cost you thousands of dollars and put a huge strain on your finances, you can understand why it’s more beneficial to get a good settlement and not pay anything out of pocket.
How much credit card debt is too much? You may not know this answer right now, but you need to consider this when you decide on the next step to take in order to get out of debt.