Having a serious problem with unsecured debt is a situation with which many consumers
are having to contend as they try their best to fend off the negative effects of the recession. Credit cards have been one of the very few available resources that they have been able to rely upon to solve their short-term cash deficits, all the while planning to pay off these high-interest balances as soon as the economy improved and their cash flow returned to somewhat more normal levels. Unfortunately that time still has not arrived as yet, and what was once a seemingly reasonable solution to a cash problem has now been transformed into an immovable obstacle to being able to make ends meet. Much to the delight of the credit card companies, many of these consumers are now trapped in the dreaded minimum monthly payment cycle in which the balances owed are barely reduced at all and the future payments on the debt are destined to continue at absurd interest rates for the foreseeable future.
For the vast majority of consumers so afflicted, the solutions to this unsecured debt problem basically come down to debt management, debt settlement (debt negotiation) and either Chapter 7 or Chapter 13 bankruptcy. The disastrous consequences to the consumer's credit that arise from electing to move forward with debt settlement or bankruptcy make these solutions suitable for only the most extreme of debt scenarios in most cases. A much more appropriate solution for those with serious but not altogether impossible debt predicaments is credit counseling and a DMP. The primary reason that this is the case is because the consumer will suffer no credit score damage as a result of the process involved. Secondarily, of course, a DMP does provide the consumer with very effective credit card debt relief that can enable them to become debt-free in just 5 years or less. This is a far preferable alternative to the perhaps decades-long repayment prospect that they may currently be facing.