Debt Solutions
What options are available to eliminate credit card debt?
You may be wondering if there really is legal credit card debt elimination or methods to reduce that debt if you are overwhelmed and unable to pay your debt. There is debt relief assistance available to you that can reduce your debt and even entirely eliminate credit card debt.
I know it looks pretty hopeless when you are in the middle of things, especially when you’re plagued with debt collection harassment, but with a little bit of education, some guidance, and a bit of time, you will put this behind you!
It’s important to try to remain rational while viewing your overall financial situation. While it’s understandably an emotional time, and possibly quite frightening, you have to remember that economic decisions are handled best as “business decisions” and not with emotion. Remember, it is all business to the creditors you owe money to. To them, it’s not about your family, the food on your table, or the roof over your head. It’s about one thing: getting you to pay them money! Debt collection harassment is meant to scare you into finding some way to pay up.
It is your business to place your needs first, and balance out your decisions with good sense. Do not feel overly-responsible to your creditors, while risking the needs of you and your family. Learn the methods of debt relief assistance available to you today to get yourself out of debt and get rid of the creditors once and for all.
So what are legal credit card debt elimination options? First off, start by getting your free credit report when you’re trying to get a handle on your debt. You can get a good run-down of all your accounts including an accurate total of your current credit card debts. While there are numerous debt relief assistance programs available, few of them are good choices! It is important to read and get educated, as what you do next is critical to you and you and your family’s future financial well-being!
Here are your debt relief assistance options:
Debt settlement will allow you to reduce your credit card debt by up to 1/2 or even more. This requires negotiating with your creditors, or paying someone else to manage your debt negotiation program in order to settle on a dollar amount that you will pay instead of the full amount. Creditors are willing to do this, because they know that if you file for bankruptcy, they will get nothing. There are a few things to be careful of when you settle your debts, and you will want to make sure that upon completion of settlement, the creditor notes that the account is settled on your credit report.
Read more about debt settlement …
This requires working with a credit counseling agency to manage your debt. They will work with the banks or credit card companies to have your interest lowered, and your payments on your credit card debt adjusted to some manageable level. You will be on a payment plan for several years, and will save a little money by having the interest rate adjusted. In return, you will pay the credit counseling company to manage this. However, this will not reduce your debt. In addition, it is also very costly and the industry has been plagued by bad press due to unethical practices. And in fact, this is very similar to debt management plans that many settlement companies are now offering.
Read more about credit counseling …
There are several methods of consolidating your debt which is a general term that describes a method of debt relief assistance that will allow you to replace numerous loan payments with one manageable payment. This may require taking out a loan, either secured or unsecured, to pay off several debts, usually at a lower interest rate. But you will be paying off this loan for a long time, leaving you in debt far longer. With a secured home equity loan, you lose equity in your home and risk future foreclosure. This option does not reduce your debt. Many debt settlement companies also offer debt management plans, similar to credit counseling agencies, which will also not reduce your debt. Finally, a chapter 13 bankruptcy is also a form of debt consolidation as you will be on a repayment plan, though likely on a reduced debt principle.
Read more about debt consolidation …
Bankruptcy should be considered as a last resort, but it is an option, and can be the right one for your situation. A chapter 13 bankruptcy will have you repay a portion of the debt out of your disposable income, over a period of time, usually 5 years. Chapter 13 bankruptcy is also a form of debt consolidation as you will be making one payment to the bankruptcy trustee, instead of paying on numerous unmanageable debts.
Read more about chapter 13 bankruptcy …
Chapter 7 bankrtupcy discharges all the unsecured, or credit card debt. It is damaging to an individual’s credit rating and credit report, but people should consider it when the debt is well out of proportion to their ability to repay. There are many cases when bankruptcy is certainly called for; however, chapter 7 bankruptcy will require the debtor liquidate all all non-exempt assets in order to repay creditors. Most of the time (about 99%), those who have filed for a chapter 7 bankruptcy, receive a discharge. A small percentage of folks who have filed will not receive a discharge of their debts, and the case will be dismissed.
Read more about chapter 7 bankruptcy …
6) Do Nothing
What happens? In most cases, banks do not sue for credit card debt. But there is about a 10 percent chance that they will. If you are sued for the debt, you have the option of appearing in court and defending your position, or simply allowing the creditor to get a default judgment on you. They have a few ways they can attempt to collect on the debt once they get a judgment.
If you have debts dealing with local businesses, you should be aware that they can use a judgment to force the sale of personal property within your home, including furniture and appliances. While most people believe they won’t take your bed and furnishings away, that’s simply not true. If a creditor wants to collect on a debt, they will! The only protection from this is co-ownership of the property, for example, with a spouse. While I have never heard of a case where a bank or credit card company took this step, I had an experience with a local business who did.
Once you’ve reviewed these debt relief assistance options, you can see that it is quite easy to reduce your debt, and even discusses how to reduce or remove credit card debt. These options are perfectly legal credit card debt elimination options. Put an end to debt collection harassment and begin to take the first steps towards being debt-free now!