Credit cards are often the culprit of the situation; particularly now, when people lose their jobs and attempt to save their home by piling payments on the easy to use credit card.
Eventually the bills add up causing an overwhelming amount of stress.
There is a way to work with a broken financial situation.
If you find yourself in this position you might choose a debt settlement strategy that will eventually get you out of your debt if you follow the guidelines and have a good payment history.
People attempting to get out of the hole have different debt settlement strategies they can consider.
One of these is debt consolidation.
In this program you consolidate all of your payments into one.
This generally decreases the interest rates and usually allows for a lower monthly payment.
Another program is debt settlement.
In this type of program you turn over all of your credit card bills, and other non-secured bills, to a debt settlement company.
You then negotiate a monthly payment which usually includes a fee to the company.
Money then begins to be saved in your account.
The company will then begin to negotiate with the different companies to whom you owe money.
Many of these companies proclaim they can negotiate debts down 40 per cent to 60 per cent of what you owe.
Another of the debt settlement strategies is for you to negotiate your own settlement.
Once a credit card company realizes you do not have the means to pay them in full they will make all types of threats.
The calls will begin in the morning and end in the evening.
Eventually they will turn the matter over to a collection agency for payment.
The collection agency might threaten you with a lawsuit.
They have a number of tactics in their bag to frighten you.
Still, if you do not have any money the odds are pretty small that they will follow through with their various threats.
Once the company realizes you have little money, you have lost your home, you are facing bankruptcy, or a number of other issues, they will be ready and willing to settle with you.
Their first demands will not be their last demands.
Many people are capable of negotiating their debt down to pennies on the dollar.
The company will have some satisfaction that they have at least received something for their efforts.