You can continue to do what you are doing now. Obviously, if you do not make payments, your debt will grow tremondously. If you do make minimum monthly payments, you will end up paying far more than you owe, due to interest. This aproach generally leaves a person paying off a debt for up to 30 years, a substantial portion of which goes directly to the creditor for fees. Without a pragmatic approach to ending the burden for good, your debt will continue to compile… indefinitely!

This option generally leads you deeper into debt than you were before. Basically, you are paying off high interest, non-deductible credit cards, with a lower interest, deductible loan. A temporary solution to a problem that doesn’t have to be permanent. The problem that people most often encounter with this approach is that they find themselves accruing a balance on their credit cards again, leaving them with a bigger debt than before. Also, one must qualify for a debt consolidation loan. To qualify a bank or other lender examines the equity in your home, credit score, and good debt in relation to income. Many people who suffer from a debt burden find that even if they wanted to consolidate their debt, they would have a difficult time qualifying.

Companies in the "credit counseling" industry are usually set up as non-profit organizations...by the banks and credit card companies! You pay a monthly fee ($100-$200 per month), and you also send them money to make your credit card payments for you. The supposed idea is that they will counsel your debt away – they claim they can negotiate interest rates and try (without much success) to get late fees forgiven. But so far, per 60 Minutes-CBS, they are hardly skilled at it. Ameridebt has been on 60 Minutes twice and is being sued by two State Attorney Generals for lack of performance. Because they are supported by the credit card companies and banks, they have no incentive to get you a good deal. And this, of course, is why CCC programs are simply ineffective. While they are quite skilled at taking your money, they often fail to make your credit card payments on time. They will deliberately avoid letting you know that they are owned by the credit card companies and leaves many customers feeling duped. In addition, many lenders consider the Debt counseling scenario the same as filing a chapter 13 Bankruptcy. Any account handled by debt counseling will read as CC on your credit report.
The banks themselves most often recommend this approach. Why? Well, wouldn't you recommend the services of a company that you owned? The counseling service, theoretically a non-profit organization, actually receives any and all of its compensation from the bank you owe the money to. So, whose side are they really on - the side of the consumer who's paying a monthly $20 administrative fee; or the bank that's paying 7% of the restructured debt? Furthermore, most credit counselors are not going to put fourth much effort to get an uncooperative bank to comply. CCC program won't work quickly, and for the majority of people, will not work at all. Statistically, CCC programs have a failure rate of 85%. We obviously would not recommend this solution; in fact, your credit is usually much worse after enrolling with credit card counseling programs.

No more debt! So what’s the problem with this option? Simple: You will pay a substantial amount more for important purchases that you make later in life. A bankruptcy will stay on your credit file for ten years. Let's say you want to buy a home a few years after filing bankruptcy. If you have reestablished enough credit to qualify for a mortgage, obtaining a loan will be simple enough. However, be prepared to pay a higher interest rate than someone who has never filed. Let's do the math. Assume you buy a $200,000 home, after filing bankruptcy; and you make a $20,000 down payment. You obtain a loan at 9% interest on the resulting $180,000 mortgage; versus perhaps, 7% for an individual with clean credit. You might think that the extra 2% interest is a reasonable sacrifice for having filed bankruptcy in the past. Wrong! That extra 2% over the life of a 30-year mortgage, will increase your monthly payment from $1,198 to $1,448, and the total of your payments will be more than $90,000 higher! The reality is that a bankruptcy will remain on a persons credit record for ten years. But now, and for the rest of your life, on every application that contains the question that asks, "Have you ever filed for bankruptcy?"; you will have to answer, "Yes." Bankruptcy is not a free lunch. It can in fact be a very, very expensive lunch. The vast majority of people who proceed in this manner don’t realize what they have gotten themselves into. They are uninformed, and they enter into bankruptcy without understanding the permanent impact on their financial record. Things to keep in mind when considering bankruptcy-

Most people are unaware of this practical solution to burdensome debt, the approach that puts YOU in control, and levels the playing field between you and your creditors. This solution is debt negotiation-where third party representation deprives the creditors of their most valuable weapon, the ability to directly contact you. Our negotiators then engage your creditors in some good old-fashioned American haggling. Haven't you ever haggled over the price of a purchase? Well, exactly the same thing can be done for your debts when you employ our team of trained and certified professional debt negotiators! Our negotiators are able to negotiate debt, on average, for 50% of balance due! It is 100% legal, completely ethical, and an incredibly effective way to get out of debt.