Reducing or eliminating your credit card debt is possible. The best way to decide what is the best option for your situation is to explore all of your options. These options can help you make an informed decision as to what will help you resolve your credit card debt.
What Are My Options?
There are several options you should consider when dealing with mounting credit card debt. It is important that you take action when your debt is causing you stress and anxiety. One of the best indicators that it is time to take steps to resolve your credit card debt, is where you find that you are paying the minimum payments on your credit cards and not seeing your balances decrease. What can you do to reduce your credit card debt?
1. Negotiate Reduced Interest Rates or Payments with the Credit Card Companies
If you are experiencing difficulty reducing your credit card balances then contacting your credit cards and trying to negotiate a temporary reduced payment or a temporary reduction in the interest rate can help. Every credit card company is different. Some companies may be willing to offer some assistance based on a temporary hardship while other credit card companies may be unwilling to offer assistance. Having some form of reduced interest or payment may give you the temporary relief you need to be able to manage and reduce your credit card balances. There are also debt consolidation companies that will work with most credit card companies to set up a payment plan with reduced interest rates to pay off your credit card balances.
2. Settle Your Credit Card Debt
Settling your debt can provide significant savings and significantly reduce your credit card balances. Each credit card company and collection company is different and therefore the settlement amount that they are willing to take will depend on their internal policies. Some credit card companies are only willing to come down to 50% of the balance to settle the debt. This option generally works if you have access to a lump sum amount to settle the debts. Generally credit card companies and collection companies want the settlement amount within a short period of time. We recommend that you seek out professional help to settle the debts as you may be able to negotiate a better settlement with the assistance of a legal professional.
3. File for bankruptcy protection
A significant advantage of filing for bankruptcy is that credit card balances can be eliminated. In a Chapter 7 bankruptcy you will generally pay nothing back to credit cards. This can bring significant immediate relief in getting your finances under control. It allows you to wipe out the monthly credit card payments and to use your current income to pay your monthly necessary expenses. There is a lot of false information on how bankruptcy will destroy your credit. We invite you to visit our blog post on The Truth About Bankruptcy and Your Credit Report to get a more truthful picture of bankruptcy and your credit score.