Credit Card Debt Relief

Credit Card Debt Relief

If you’re like most Americans, you carry some amount of debt. It could be your mortgage or a student loan, or it might be related to the credit cards you use. The amount of debt you have usually depends on a variety of circumstances, including your age, your level of education, your past and current career situation, your health, and many other things. It also depends on your spending habits.

Many people have used credit cards effectively. They use them to build credit, to travel, and to have peace of mind that money is available to them if an emergency should arise. But in many cases, credit cards were overused. If you’ve found yourself in credit card debt that is more than you bargained for, you are not alone. Whether it’s because of mistakes you’ve made or circumstances beyond your control, too much credit card debt is a common struggle faced by many people today.

The good news is there are solutions. Credit card debt relief is possible and eliminating the debts that are overwhelming you does not mean ruining your life.

Credit card debt relief can be helpful, but it’s important to research your options. There are scams out there and many unsuspecting consumers, assuming they are helping their situation, wind up in an arrangement that makes thing much worse. If it feel as if you are being rushed into making a decision or something seems too good to be true, assume it’s not the best option for you and move on.

Why Is Debt Relief Necessary?

In an ideal world, everyone would be able to afford what they need and want in life and never need to use credit. In a slightly less than ideal world, credit would be necessary, but it would be manageable and a tool that helps improve someone’s overall financial situation.

Sadly, ideal – even slightly less than ideal – situations rarely exist. This is especially true considering the efforts some lenders go to in an effort to take advantage of consumers.

Borrowing money is expensive and can feel like a trap. If you’re only able to afford minimum payments on your credit cards each month and those credit cards have high interest rates, your financial situation is likely grim. Even in a best case scenario where you’re able to pay off your credit card balance eventually, you could end up paying back at least twice what you owed originally. Not to mention the decades it’s likely to take you to pay it back.

And this is assuming you’re even able to afford those monthly payments. One missed payment and a late fee and hike in interest can send you into a spiral of debt problems. Before you know it debt collection agencies are calling and legal action against you is on the horizon.

What are My Debt Relief Options?

The good news is you have options, even if you’re reached the point where your situation seems dire.

Those faced with mountains of debt do not need to give up and accept whatever fate bill collectors have in mind. What can you do if your debt is overwhelming?

Consolidate Debt: This might be an option for those who have several debts. It requires you to take out a new loan that is supposed to be used to pay off the other debts you have. Once the debts are consolidated under the single new loan, you’re able to make one payment, possibly with a lower interest rate and/or lower monthly payment.

The downside is this does nothing to reduce the overall amount you owe, though it can eliminate the addition of late fees, over-limit fees, and other penalties that tend to pile on and make your existing debt larger. The other risk is there are many shady debt consolidation offers out there and if you aren’t careful you’ll make your situation worse.

Lender Hardship Programs: Some credit card companies will work with you to negotiate a new arrangement, depending on your situation.

For instance, if you’re struggling because of medical expenses or because you were laid off from your job, you might be able to put payments on hold temporarily or reduce your monthly payments. Just make sure you understand the details of any new arrangement and that any arrangement you make actually does benefit you.

Debt Settlement: Settling debt can help you reduce the overall amount you owe on credit cards, but it requires you have a chunk of money available right now or at least in the short-term.

Lenders are willing to negotiate a settlement with you because they know they are at risk for receiving nothing if you choose to file for bankruptcy. In a settlement, at least they get a portion of the money owed to them.

Paying off a credit card for less than the total you owe in one lump sum can be beneficial, but there are things you need to consider, such as how it will affect your tax situation.

An attorney can help you arrange a debt settlement that truly works in your favor and puts you in a better position than you currently find yourself. It’s possible to arrange a settlement on your own, but it can be challenging. If you owe a large amount of money and/or have multiple debts, an attorney can be an invaluable resource. He or she will ensure your debt settlement arrangement is good for you and that the arrangement is binding for all involved.

One final option, if settling your debt isn’t an option, is to file for bankruptcy. Doing so can help you eliminate some debts and start fresh financially. Filing isn’t the best option for everyone, and there are several things you need to consider. However, if your financial situation is not improving and you see no end in sight, bankruptcy could be your best option.

If you’d like to know more about credit card debt relief and how to make the best of your situation, we can help. For more information or to schedule a consultation to discuss credit card debt relief, contact us at 1.800.220.4318.