Armor Credit Services - Debt Relief Options | Armor Credit Services

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Debt Relief or Debt Reduction Options

Let Armor help you find relief from debt today.

Are you struggling to make the minimum payments on your credit card balances?

Is debt affecting other aspects of your life?

Are you living paycheck to paycheck?

Maybe you are receiving those annoying creditor calls at work, during dinner, or late at night.

Or, maybe you are "robbing Peter to pay Paul" - constantly transferring balances in a fruitless attempt to stay ahead of rising interest rates.

Due to some type of hardship (divorce, illness, layoff, business failure, reduction in hours or pay), you may have fallen behind in your bills. Considering bankruptcy?

If any or all of these sound familiar then you most likely require relief through debt reduction.

We at Armor Credit Services understand your situation and are here to help. We believe our debt settlement plan is the most powerful way to reduce unsecured debt while avoiding bankruptcy. What follows are the five most common debt reduction options: Continue to make minimum payments, credit counseling, home equity loans, debt arbitration (also known as debt settlement), and bankruptcy. Each debt reduction option has its strengths and weaknesses, depending on your particular situation.

	Option 1: Continue to make minimum payments or pay nothing at all
	Interest rates average over 15% and creditors can raise rates at any time.
	By making minimum payments, you pay nearly 50% of your original balance in interest alone over the first 3 years and barely make a dent on your principal balance.
	If your rates are 24% or higher, it is physically impossible to pay off your debt by making minimum payments.
	If you only make minimum payments, you do not reduce your balances and therefore do not help lower your debt to income ratio.
	There is no guarantee that your minimum payments will not increase as creditors maintain the right to raise interest rates at any time.
	If you stop the minimum payments and do nothing, you will destroy your credit while not eliminating any debt in the process.

	Option 2: Enroll in Credit Counseling / Debt Consolidation / Debt Management
	Credit Counseling companies are typically funded by the same creditors that you owe.
	Credit Counseling is like another form of "collections" as they charge interest and fees and disburse your payments directly to your creditors. Credit profiles are normally damaged by enrolling in Credit Counseling / Debt Consolidation / Debt Management programs.
	Credit Counseling conveniently consolidates your bills into one monthly payment.
	It will typically take 3-5 years to pay down debt in a Credit Counseling program.
	You will pay nearly 25% of your original balance in interest alone over the first 3 years.
	Credit Counseling companies have pre-negotiated interest rates with your creditors. These rates may be higher, lower, or the same as your current rates.
	In Credit Counseling, you will repay the full balance plus interest to your creditors.
	Credit Counseling companies charge both a set-up fee and monthly fee, often called a "donation". Monthly fees may range from $20-$50

	Option 3: Consolidation loan or Home Equity Loan
	To secure home equity loans or consolidation loans, you must first qualify.
	Home equity loans require ownership of Real Estate property or a pledge of collateral.
	Home equity loans reduce the future equity available in your property.
	If you qualify, you can use home equity loans to eliminate your credit card balances.
	Rates on home equity loans are typically much lower than credit card interest rates.
	You will probably be required to pay a transaction fee upon closing the home equity loan. This fee is paid upfront or built into the interest rates.
	Missing payments on home equity loans may cause you to lose the real estate or collateral you pledged, often your home.
	You will still repay the full amount of your credit card balances.
	By paying credit cards with home equity loans, you exchange unsecured debts for a secured debt.
	Home equity loans should not have a negative affect on your FICO score although they do not lower your debt to income ratio until you repay the home equity loan itself.

	Option 4: Debt Arbitration / Debt Settlement
	Also known as debt settlement, debt arbitration is the process of negotiating lump settlements on your unsecured debt.
	The debt arbitration firm negotiates down your whole principal balance, irrespective of the interest and finance charges creditors try to add on your account.
	Debt arbitrators are independent companies not affiliated with your creditors.
	Debt arbitration companies normally charge fees for their services.
	Your debt is paid off in anywhere from three to eight weeks depending on your cash availability. Armor Credit Services' program only offers one time payment plans - meaning that you should have approximately 65-70% of your published debt available for the negotiations (or at least be able to obtain this amount wthin a 7-14 day time frame.) The 65-70% normally covers the discounted settlements plus the arbitration firm's service fees.
	While in debt arbitration, you do not make payments to your creditors. This may result in an 'open delinquency' on your credit until the debts are settled.
	Debt arbitration may not be a positive on your credit report and may adversely affect your FICO score, however, Armor Credit Services will use their extensive knowledge of the credit reporting industry to minimize any adverse reporting.
	Debt arbitration lowers your debt to income ratio more quickly than any other debt reduction option outside of bankruptcy. Debt to income ratio is a significant factor used by lenders to qualify you for a mortgage loan.
	With debt arbitration, you will typically repay 40-60% of your current debt balances

	Option 5: Bankruptcy Chapter 7 or Bankruptcy Chapter 13
	Bankruptcy has a severe negative impact on your credit rating for 7-10 years.
	Bankruptcy may cost $800 to $1,500 or more to file including attorney fees.
	Bankruptcy may have a negative impact on your employment status.
	In Chapter 13 bankruptcy, you are still required to pay back a portion of your unsecured debt, in some cases a full 100%.
	Chapter 7 bankruptcy will normally eliminate all of your unsecured debt.
	Bankruptcy will prevent most creditors from attempting to collect your debts.
	Bankruptcy hurts your FICO score and may result in higher interest rates on future loans.
	Bankruptcy carries a negative stigma, mental stress, and other burdens
	Bankruptcy should be avoided if at all possible

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