Prepare a list of all your debts on your computer with secured debts listed separately.
Now prepare a copy of the file and remove the amount of credit card debts you owe.
You will find that the amount of unsecured debt falls drastically.
Theoretically, your credit card debt should reflect your day to day expenses.
However, the truth is that we use credit cards for making huge long term purchases as well.
This is why debt settlements have become so popular.
People have used credit cards to buy stuff that ought to have been purchased using a personal loan or a secured debt.
When credit card debt goes beyond control, debt settlements are the best way out.
Why not use debt consolidation? This is a viable option amongst the many options for debt settlements only if your credit debt on a card is beginning to go out of control.
You cannot submit proposals for a debt consolidation loan if you have not repaid even a single cent to your credit card issuer for the past few months.
Not many lenders will be interested in giving a debt consolidation loan for a person who owes more than $10,000 in credit debt on a card.
Unless you opt for debt settlements, your credit card debt will not come under control.
What is the importance of 60% reduction in the debt? The current economic condition can hardly be described as ideal.
Recession, liquidity crisis, lack of demand, unemployment- there are numerous problems in the economy.
This has been countered by the stimulus program.
To boost their income, credit card issuers are ready to settle for amounts that are even 60% less than the original amount owed by the borrower.
If you owed $10,000 to your credit card issuer, then you will have to pay just $4,000 or less and your debt would be settled.
Another advantage is that you will get time to pay the settlement amount of $4000.
You can deposit the money in an escrow account on a monthly basis.
If you do not opt for debt settlements, you will not enjoy any of the benefits mentioned above.