Freedom from Consumer Debt

Freedom from Consumer Debt

As our national economic situation grows ever more bleak, the average American household already suffers under several consumer debt accounts adding up to the low five figures, according to recent financial studies.

With credit more difficult than ever before for ordinary borrowers to garner and our citizens’ dismal track record regarding personal savings, the scourge of consumer debt must be recognized and appropriately dealt with.

Borrowers should take a look at all of their consumer debt obligations, particularly the unsecured consumer debt, and keep open only those cards that have the lowest rates of interest; the majority of consumer debt accounts would best serve the head of household by simply being closed for good.

All other consumer debt accounts, even if they still appear to be important to the family’s well being, should be avoided at all costs.

For borrowers that have undeniable addictions toward furthering their consumer debts, they’d best be served by removing their temptations through hiding the physical cards or even preserving them in a block of ice: anything that limits the future accumulation of consumer debt.

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The temptation to employ consumer debt accounts for ordinary every day purchases has grown even more insidious over recent years as many of the largest lending conglomerates offer reward points and various chances at awards – boasting astronomical odds, of course – for each dollar charged against the consumer debt account.

However attractive the grand prize may seem or useful the frequent flier miles (one of the most common reward features), the momentary advantages pale against the household crippling economic turmoil of unchecked consumer debt loads.

Heads of household must understand and appreciate how severely the minimum payments for consumer debt accounts could influence the larger circumstances surrounding budgetary regimens. The continual trudge of compound interest too often means that purchases lingering around the consumer debt balance sheet could end up actually costing borrowers three or four times the original amount.

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While putting an end to unnecessary shopping sprees and refraining from usage of consumer debt accounts should certainly be the first step toward economic stability, American borrowers eager to dissolve their consumer debt burdens must also take steps toward the reduction of existing loans.

Past generations, of course, would simply invoke Chapter 7 bankruptcy protection to satisfy consumer debt amounts that could not otherwise be repaid.

Nobody ever looked forward to bankruptcy, twas always the very last option available since households would essentially leave their collected property up for seizure by the courts: and, even beyond the forfeiture of possessions, the damage to credit ratings could genuinely be more dangerous in this modern world.

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Still and all, American borrowers trafficking in consumer debt enjoyed some solace in the knowledge that Chapter 7 bankruptcy could protect their family. Nowadays, however, after recent legislative changes, middle class borrowers should not even assume that Chapter 7 consumer debt elimination bankruptcy programs would be offered.

Indeed, many borrowers worried about their consumer debt holdings but unwilling to navigate the stunningly inefficient bankruptcy proceedings have instead turned to settlement negotiation. An innovative solution to consumer debt predicaments, settlement negotiation professionals successfully ask lender representatives to surrender as much as two thirds of their consumer debt liability in return for a speedy remuneration of whatever funds remain, and, while most families’ consumer debt balances are such that repayment shall take several years for completion, settlement negotiation shall at least provide an effective mechanism with which to begin the process.