3 Different Ways to Eliminate Credit Card Debt
There are a number of different ways in which a person will be able to eliminate credit card debt. They can consider debt consolidation, reaching a settlement agreement with bill collectors, or filing bankruptcy. Each of these options has its own set of pros and cons. Of course, you will want to ensure that whichever one you choose will not end up getting you further into debt. The whole idea is to find a way that you can get out of debt and begin to live a life that is stress free.
Debt consolidation makes use of a finance counselor in order to help you manage your debt or they may provide a loan for you to use to pay off your debt. It will be necessary to get your bills together so that the counselor can contact each of your bill collectors in an effort to get a lower rate of interest for you. Each month, you will make your payments directly to the company handling your debt consolidation. They will then distribute this money to each of your bill collectors.
If you choose to negotiate credit card debt through a settlement with your debtors, it will be necessary to contact each company in order to offer them a settlement. It is important to only make offers you can afford when negotiating with any debtors. Some companies will want to make a settlement agreement for at least 50% of the amount that you owe. For example, if you owe the bill collector $1,000, they would probably expect you to repay them at least $500. There are cases where they will make an exception, especially if you let them know that you might be considering bankruptcy. In this case, they might accept your offer. Be sure to pay the amount agreed on as quickly as possible. Follow this same procedure with every one of your debtors or credit card companies. Do not negotiate with each company at one time. You should wait until you actually have the money to cover a settlement agreement.
Bankruptcy should be considered only as a last resort. If you file Chapter 7, it will eliminate your bills, but you will also end up paying a fee and will need to complete some online financial counseling. After paying the required fee, you will appear before a bankruptcy judge with your lawyer, after the bankruptcy hearing you will be able to start living a live free from the stress of unpaid debt.