Over my head in credit card debt, I learned that using debt settlement could help me eliminate my debt fast - and I took advantage of it.

When my wife and I were assessing our financial situation years ago, we wanted to make sure we had all our options in front of us. In doing our research, we realized that we are were not alone in our debt problems. Here’s a summary of our troubles:

- we were in approximately $35K in CC debt
- we were paying for gas and groceries on credit
- we had no emergency fund
- we were transferring balances to 0% cards
- we were NOT saving for retirement
- we had major stress from our high debt load

Does this sound like you? It very will might, because a recent study by the Federal Reserve Board found that a lot of families are in deep financial trouble.

In the last 10 years, bankruptcies have nearly doubled in the United States, with more than 1.6 million people filing in fiscal 2003 alone. Consumer debt hit an all-time high of $1.98 trillion in October 2003, for an average of about $18,700 of debt per U.S. household. Credit card debt reached $735 billion in January, for an average of $12,000 per card-carrying household.

What Were Our Options?

We looked at Credit Counseling, getting a consolidation loan, and as a last resort, bankruptcy. Each of these debt relief options has it’s pros and cons, but overall, we felt that choosing debt settlement was the best fit for our situation, and we are very happy with our choice.

Using debt settlement, we learned that we could can eliminate 40%-75% of our credit card debt. On average, most people can get out of debt in 15 to 30 months. In the end, my wife and I eliminated 56% of our debt by choosing debt settlement.

Major Reasons for Choosing Debt Settlement

It is simply the fastest way out of debt, other than bankruptcy. The main reason it’s the quickest way out is that it’s the only solution where your a substantial portion of your debt is actually forgiven.

Permanently written off! Gone! History!

It allowed us to start saving our money immediately. We chose to save money and pay in lump sums rather that start a payment program with a settlement company. The money we saved we used to pay off our creditors at a reduced amount.

Other Reasons for Choosing Debt Settlement

1. Our Credit Scores. Our credit was not that good to begin with. We had been transferring balances for years and had opened and closed several revolving credit accounts on our reports. That, in conjunction with our high balance to credit limit ratio, and high debt-to-income ratio had out credit reports in rough shape.

   We understood that debt settlement would affect our credit scores. But considering it wasn’t that great to being with, we determined it wasn’t a major factor.

   We were willing to live with a little more credit damage because it was offset by some serious debt relief. Credit can be repaired and negative credit marks cannot stay indefinitely.

2. We not interested in prolonging our debt relief. Credit counseling and Debt Consolidation loans simply have you making payments on your full debt for a longer period of time. Plus Interest!
3. It retains confidentiality. The public will not be able to find out about your financial condition, as in bankruptcy.

We Considered the Benefits of Debt Settlement:

• Knowing that you’ve taken action will immediately start to give you peace of mind.
• In most cases, creditor harassment will end.
• You will retain confidentiality - unlike bankruptcy.
• You will begin to save money immediately (no more interest payments or penalty fees).
• You will be debt free in a short time (some as soon as 9 months, others up to 3 years).
• Your debt-to-income ratio will improve. This will help your credit score tremendously.

Additional things to consider:

• Your credit will be damaged, although not as severely as in bankruptcy.
• Any forgiven debt reported on form 1099-C over $600 will be treated as income by the IRS and you may have to pay tax on it. However, if you were insolvent at the time of your settlement, than you will not have to pay tax on the cancelled debt.