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If you have hit the wall financially, then you have probably considered negotiating a settlement of debt with your creditors. Before doing so, look at all of your options, as there are many debt reduction programs, and pros and cons associated with each. The biggest factor in your long term financial well being is going to be whether your expenses are less than your income, so keep that in mind while examining the relative merits of each form of debt reduction.

This is especially important if you are genuinely struggling to make ends meet already. You see, most forms of debt reduction aren’t going to do much in terms of reducing the amount you are spending servicing debt each month. Whether it is a consolidation loan, a consumer credit counseling or debt management program, or even Chapter 13 bankruptcy, all of these are going to require a fixed monthly payment from you, whether you can afford it or not. For those of us who are literally living from paycheck to paycheck, an unexpected expense can destroy your monthly budget.

Most people will begin a debt relief program with good intentions and better hopes. We will look at consumer credit counseling as one example. They have reduced your interest rates, but the total amount your are making in that single payment every month will 9 times out of 10 be just as high as you were paying before. If that amount is $700.00, you will be struggling just as much, with the difference that at least there is light at the end of the tunnel, and the debt will be paid off in 5 years instead of 35 years.

But what happens when you need to fix your leaky roof, or your car engine blows up? You’ll be shelling out over $1000 minimum for a repair you absolutely must have, and in all likelihood you’ll miss your monthly payment to your creditors. You will be terminated from the program, and right back where you started – in the hole.

Other programs, such as Chapter 13 bankruptcy, are similar in that it seems that if anything goes wrong, failure to make your debt payment is the only option. For these reasons, 75% of all debtors who begin programs like these fail in less than a year. What is the underlying weakness of these programs that cause so many failures? One word: Flexibility.

You simply can’t call the Chapter 13 bankruptcy trustee or the representative of the credit counseling agency and inform them that you need a new transmission for your car, so you won’t be paying them this month. If these programs had that kind of flexibility, their success rate would be much higher. Unfortunately, these programs simply don’t take into account how unpredictable our finances can be on a day-to-day basis. They are almost designed to produce failure.

Fortunately, there is a program available where a settlement of debt is the primary objective, rather than simply making your old payments under a new name. It is called Debt Settlement. Many will argue against it, correctly asserting that it will have a negative impact on your credit report. But when you are already behind on your payments, this argument is somewhat moot, especially when the banks aren’t even lending to those who have perfect credit.

With debt settlement, you will save up enough in a separate account to negotiate a settlement of debt owed to each of your creditors. The process typically takes 2 to 3 years, and it is strongly advised that you seek professional representation to procure the best results. It is a valid, and less damaging, alternative to bankruptcy, and for those who go through it, a life changing and financially liberating path towards credit freedom.

With this economy, many are struggling. We’ll help you find the resources to manage debt effectively. For more information on negotiating a settlement of debt and other debt issues, please visit us at http://www.CureMyBadCredit.com.

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