Christians face the same threat from mounting credit card debt problems that all Americans struggle with in their financial lives. Debt problems can happen to anyone. Debt problems are frequently the result of special circumstances like long term job loss or family illness. Debt problems are very often, a blameless problem. Nonetheless, it is still a crisis facing many Christians that requires a solution if a healthy financial future is to be yours! There are essentially five things you can do when faced with the impending threat of a credit card debt problem that has grown beyond your control and is putting your future at risk. Do Nothing: This is probably not the wisest course of action as debt problems will certainly not fix themselves. In fact, with increasing credit card interest rates, and over the limit and late fees combined with the possibility that you may only be paying the minimum monthly amounts, the future would look bleak. So to do nothing may not really be an option if you are seeking a proactive solution. Bankruptcy: If your goal is a healthier financial future, this solution should not be rated very high on your list. A bankruptcy filing remains on your credit report for up to 10 years. The result is difficulty in securing home and vehicle loans at reasonable rates of interest. A bankruptcy could potentially cost you tens of thousands of dollars in these interest charges over time. And a bankruptcy carries with it a certain stigma should others become aware of your situation. Most Christians are not very comfortable filing bankruptcy and do actively seek alternatives. Credit Counseling Services: This solution is certainly a popular method of resolving unsecured debt problems with Christians. A credit counseling agency is a non-profit organization offering a multitude of financial services including household budgeting assistance, and debt management plans they design specifically for your debt situation. A credit counseling agency establishes a debt repayment plan that may include almost all types of unsecured debts, and hopefully secures interest rate reductions with your creditors. This process is facilitated by them and you pay a single monthly payment, which is distributed to the creditors in your debt repayment plan. A credit counseling service does establish a debt repayment plan that is intended to pay back all of your unsecured debt as well as any accrued interest charges. Debt Settlement Services: Christians are more frequently turning to debt settlement services to resolve their unsecured debt problems. Christian debt settlement, also referred to as Christian debt negotiation, is not as prevalent and well known as credit counseling services because Christian debt settlement is a “newer method” of resolving unsecured debt problems. However, Christian debt settlement is an honest and effective debt reduction solution that is certainly worth investigating. Christian debt settlement services are “for profit” companies, in contrast to credit counseling services. These debt settlement services negotiate directly with your creditors (on your behalf) to reach a “mutually agreed upon” reduced amount that will be considered payment in full. That “negotiated” amount is remitted in a lump sum payment and will satisfy your full unsecured debt owed to that creditor. Christian debt negotiation is becoming more popular because it is an aggressive and effective method to resolve debt problems quickly and provide that “fresh start” Christians are seeking. Christian debt negotiation is a viable alternative to bankruptcy, and over the last decade creditors have become much more flexible in their attempts to work with financially distressed individuals. Debt Consolidation Loans: This debt relief solution is one of the first that occurs to Christians when they are attempting to resolve their credit card debt problems. It does have merits in terms of advantages: one single monthly payment, an interest rate that will be lower (perhaps significantly lower) than the interest rates being charged by creditors, and a shorter timeframe to be rid of your unsecured debt problem. The disadvantages, however, must be carefully considered. To obtain a low rate of interest, it will likely be necessary to secure this debt consolidation loan with an asset. Typically that asset is your home. Now you have traded your unsecured debts and converted them into secured debt, and your “home is on the line”. If you encounter similar problems in the future, your home may be at risk.
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