Debt Relief Of America

Debt Relief of America works with credit card companies to get them to take a percentage of what you owe...

Times are changing and today the average American is in debt over his or her head. It is estimated based on the G19 report compiled on a monthly basis by the Federal Reserve System that the average American household probably owes at least $8,000 in revolving credit debt. While those estimates are considered to be the most comprehensive of any report out there, there are still some weaknesses that do not tell the whole story in the opinion of many financial experts. One case in point is that the Feds base those figures on the number of households from the last census. Unfortunately, those statistics don’t take into consideration that probably as many as 25% of American households don’t hold any credit cards whatsoever. That being the case, the figure would jump significantly and would realistically be along the lines of an average debt of $10,000 plus per household.

Looking at this from another perspective, there are at least 20% to 30% of credit card holders who pay their bills in full as they come in each month. Now you have a figure that is extremely higher on the average debt per household. Too many families have found it necessary to live off their plastic in times of financial difficulty and as a result have maxed out their cards and can’t even make minimum payments. Debt Relief of America (DRA) is primarily a debt negotiating company that works as an intermediary between consumers and credit card companies. They work on your behalf to get your balances reduced so that payments become manageable.

While consumers have other options such as taking out debt consolidation loans or trying to settle on their own, Debt Relief of America works with credit card companies to get them to take a percentage of what you owe. They report that they can save you as much as 40% to 60% of your outstanding balance. In the beginning you will give them a list of all your creditors. DRA will contact each lender individually and negotiate a settlement with them. Some companies might settle for 40 cents on the dollar where others may only accept 80 cents. The idea is to get your total debt reduced by as much as possible so that you will only pay a portion of what you owe.

Once all of your debtors have been contacted DRA will set up a monthly payment plan with you. Any fees you owe them plus the total payments to lenders will be paid directly to Debt Relief of America. In setting up a debt negotiation plan you can potentially pay off all your outstanding credit debt within a mater of one to three years. Unfortunately, there are some drawbacks that you might want to be aware of.

First of all, if you do settle your debts in this manner with those credit card companies you need to realize two very important things.

1. All credit cards will be closed out.
2. This will be reported to the Credit Bureau and reflected on your credit score.

If you are in debt so far over your head that this is the only way you can see your way clear to pay off these bills, then this is probably a good option. Understand from the beginning that you will have to suffer some consequences like a lower credit score and no more charge cards.

When all is said and done, it is more responsible to at least make an effort to pay a portion of what you owe than to leave the lender holding the bag. Too many financial institutions have gone under because of consumers and your effort to pay even a portion of your debt is the right thing to do.