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Your Options To Get Out Of Credit Card Debt


If you’re struggling with credit card debt problems, you are definitely not alone. Millions of Americans are struggling with high credit card interest rates, unstable employment, and a fear of their unknown financial future. If you are looking for a way to resolve your credit card debt, there are many options available and the solution that’s right for you depends on your specific circumstances.

Below is a brief introduction to some of the various debt relief options for your review so that you will be better educated about debt relief options.


1. Do Nothing – Continue Making Minimum Monthly Payments

Many people struggle to make their minimum monthly payments. With credit card interest rates generally above 15%, it could take up to 30 years to payoff $30,000 of debt. At 25% or higher, it is virtually impossible to pay off your debt by making just minimum payments. This is compounded by the fact that minimum payments merely cover interest and little or no part of the principal balance is being paid down. Credit card companies make more money the longer you stay in debt.

If you are facing a financial hardship and maintaining minimum payments is too difficult for you to make ends meet, our program may be able to help you to negotiate reductions on your debt, avoid bankruptcy, and come to an agreement with creditors.

2. Bankruptcy*

Bankruptcy is usually a last resort – most people file for bankruptcy only if they have no other choice. While bankruptcy can possibly erase most debts completely, it creates a public record that stays on your credit report for up to 10 years. This can make it hard to be approved for a car loan, home loan or refinance, obtain life insurance, or even get a job. Because of the long term challenges a bankruptcy can create, it’s important to carefully consider bankruptcy before proceeding.

Chapter 7 Bankruptcy is a straight bankruptcy and requires a liquidation, or sale, of all of your assets that aren’t exempt. Bankruptcy basically wipes out all your qualified debt and you start fresh all over again. However it has become more difficult to qualify due to the stricter bankruptcy reforms of 2005. Regardless of whether you qualify, you may want to avoid a bankruptcy for your own personal reasons.

Chapter 13 bankruptcy is a little different. This is a reorganization of your existing liabilities but allows people with a steady income to keep ownership of exempt property. The court orders that you pay all your disposable income to a court appointed trustee, who in turn disburses payments to your creditors in a repayment plan over a duration of 3 to 5 years.

If you have questions about bankruptcy or are considering it as an option, we advise you pay to retain an experienced bankruptcy attorneylicensed in your state.

3. Consumer Credit Counseling


Credit counseling services allow you to work with a certified credit counselor to devise a plan that is tailored to your specific needs and goals. They do not erase or reduce the debt. Instead they work with you to budget money so that you can pay off the debt. Collection efforts by your creditors may continue while using a credit counselor and most plans require you to pay your entire balance plus interest over the life of the plan, which is usually five years or more. Consumer credit counseling agencies usually work on behalf of the creditors and are compensated by the creditors themselves. This does create a potential conflict of interest, so be sure to understand if they are collecting fees from both you and your creditors.

4. Debt Consolidation

debt consolidation loan is when you take your all your current debt and “consolidate it” into one bigger debt. Because you probably already have too much debt that was obtained with just your signature (unsecured), you will typically either need some security like a house or other collateral to obtain the loan.

It may not make sense to borrow your way out of debt or change unsecured debt into secured debt, because you could be putting your house or vehicle at risk. People lose their homes this way. Also, right now, it may not even be an option for some homeowners because of the state of the housing market, and depending on your credit score, you may not qualify for an unsecured loan. This option does not reduce or settle your debt, it will only shift your debt from one creditor to another, which may not be a very effective path to resolving your debt.

5. Do-It-Yourself Debt Settlement

This is where you basically take matters into your own hands and do everything from setting up your own budget to negotiating directly with your creditors. Out of all of the options, although this is the cheapest, it may also be the most dangerous. If you have three or more credit cards it could be hard for you to even get started.

First, you’ll have to identify the person with authority to even begin negotiating your accounts. Finally, if not done properly you could be taken advantage of or make an agreement that your credit card company later decides to rescind.

6. Debt Negotiation

Debt Negotiation is an aggressive method of debt resolution in which we negotiate with your creditors on your behalf to get them to agree to accept less than the full principal balance to satisfy your debt. The amount that the company can settle for will vary from creditor to creditor and from one program to another.

Settlement negotiation is one of the most effective options available to consumers since creditors know that if you get into such a bad financial position that you can’t pay your monthly payments, you may decide to declare bankruptcy or simply do nothing. Therefore, creditors are usually very willing to settle for a lower amount, given your hardship, than risk getting nothing at all.

To qualify you must owe unsecured debt, such as credit card debtmedical bills, personal loans, or deficiency balances from a repossession. Another important qualification is that you must be experiencing some sort of financial hardship which is making your ability to pay your bills in full problematic. Common problems that people are facing when they begin seeking advice are divorce, medical problems, loss of job, unpaid monthly car loan payments or a reduction in income. A financial hardship applies to any number of situations that prevent a person from being able to pay back their debt now or in the future.

Debt relief companies may have relationships with your creditors and have been negotiating on behalf of thousands of people every day. Although each situation is unique, it is not uncommon for a debt settlement company to negotiate reductions of as much as 40% – 60%* of an outstanding amount and help a customer to a debt-free life in just a few short years. A qualified debt settlement company charges a fee only after they have achieved a satisfactory settlement for you.

Although debt settlement may affect your credit, it can be a better option than bankruptcy and can improve your credit rating over time much faster as you begin to settle your debts.

Which Debt Relief Option Is Right For You?

When it comes to resolving your debt there is no completely “pain free” way of doing it. If you want to resolve your debt in the SHORTEST amount of time and for the LEAST amount of money, then debt settlement may be the best option for you.

We believe that we provide a better alternative to Bankruptcy, Consumer Credit CounselingDebt Consolidation, attempting to do it yourself, or simply doing nothing at all to address your debt problem. A reputable debt relief company like ours can provide a more holistic approach to debt reduction.

Our trained debt relief experts will give you a free, no obligation consultation and help review your debt situation to see if you qualify for debt relief through debt settlement negotiations.

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