Credit Card Debt Relief

Are you wondering if you need credit card debt relief? 

Unfortunately, with today’s failing economy, many Americans are asking this very question. In order to help answer this question, consider the following statements and see if any sound familiar. If so, you may need credit card debt relief. 

You have no idea how much you owe.

You have more than three major credit cards. 

You lie about spending or hide credit card statements from family members.

 You’re at or near your credit limit on your credit cards. 

You write checks hoping a deposit posts before they clear. 

You take out cash advances on your credit card to pay other bills. 

You’ve been denied credit. 

You don’t have any savings. 

You make minimum payments on your credit cards. 

You get calls from debt collectors. 

You’re afraid to look at your statements each month. 

You have no idea how much you owe. 

You have more than three major credit cards. 

Minimum Payments for Debt Relief 

Strangely enough, many people feel that they are ok if they are only making the minimum payments on credit cards and that this, in some crazy way, is actually a form of credit card debt relief. The minimum amount is only your interest, so if you only pay that, you’re never going to see any debt relief; in fact, things will most likely get worse! If possible, it is best to pay off your credit balance monthly. By doing this, you are able to avoid the high interest that makes it so hard to pay anything other than the minimums.

 Balance Transfers for Debt Relief, 

Try and stay away from credit card balance transfers when searching for debt relief. Borrowing from Peter, to pay Paul, is no way to get out of debt. This type of solution can actually worsen your situation. In order for a balance transfer to actually work, you must properly understand all the hidden and disclosed charges associated with it. By this, I mean that if the credit card balance transfer is going to involve numerous charges and fees that outweigh the reason for the loan itself, debt relief, then you may be better off finding another debt relief option. If you do find a viable balance transfer option, then it is important to properly budget, so that you can ensure the loan is paid back under the terms of the agreement. 

Home Equity for Debt Relief 

If at all possible, stay away from home equity loans as a form of debt relief as well. While the interest rate you pay may be reduced, it is paid out over a longer period of time, costing you more, and must be secured with something of value such as a home. When converting an unsecured debt to a secured one, with home equity,you could lose your home if something happens that causes you to miss payments.

 Debt Settlement for Debt Relief

In my opinion, a better option for debt relief is the Debt Settlement route. Debt Settlement involves negotiating with credit card companies to lower the amount of debt that you actually owe.  Please keep in mind that Debt Settlement is a very aggressive form of credit card debt relief and, depending on your score when you enroll, can negatively impact a credit rating. Debt Settlement is not for everyone, but it can be an effective for of debt relief when used under the proper circumstances and done through a reputable company. Typically, consumers are able to reduce the amount they owe by up to 50 percent and see real debt relief in as little as 12 to 36 months.  Debt Settlement may be an effective debt relief solution for consumers who owe a lot of money on credit cards and are barely able to afford their minimum monthly payment or have already fallen behind.

 Credit Counseling for Debt Relief

Others may wish to seek the assistance of Credit counselors when seeking debt relief. Credit counseling involves working with your credit card companies to lower interest rates and late fees to make your minimum monthly payments more manageable. With consumer credit counseling, a consumer will usually see debt relief in 4 to 5 years and may be able to save money on the high interest charges. However, it is devastating to credit depending on how your score is upon enrolling. Nevertheless, it may be an appropriate form of debt relief for people that are paying more than the minimums on their credit cards, but are still suffering from high interest rates. 

Bankruptcy for Debt Relief

For many people in search debt relief, bankruptcy is also available option.  While I’m not an attorney, and cannot provide legal advice, in my opinion, bankruptcy should only be considered as a last resort due to the severe credit implications. That being said, for consumers who owe a significant amount on credit cards and do not have adequate income to ever repay their obligations, then bankruptcy may be a suitable debt relief option. For example, in a Chapter 7 bankruptcy, you are able to liquidate non-exempt assets of value; money made from the liquidation is used to partially repay your creditor. For consumers who do not have any assets of value, typically, they do not have pay back the credit card companies anything. If you happen fall under this category, Chapter 7 bankruptcy is the fastest and most effective form of credit card debt relief and you should consult with a bankruptcy attorney to discuss your options. 

Good luck and best wishes in finding the right debt relief solution for you.