Your Options To Get Out Of Credit Card Debt No ratings yet.

BEGIN WORKING TOWARDS DEBT RELIEF TODAY!

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.

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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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Credit Card Debt Settlement Process No ratings yet.

Being in debt isn’t great. Being unable to pay your debt is even worse. While no one likes dealing with debt collectors, doing so can help make your debt more manageable—and maybe even reduce how much you owe through the process of debt settlement.

Debt Settlement

Debt settlement is a process of negotiating with one or more creditors to reduce the balances owed by debtors. Also known as debt resolution, the process can benefit all parties, although the scales are tipped on the side of the person who owes money.

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When settling makes sense?

Debt settlement is not for everyone, but it can be a good solution if your only other option is Chapter 13 bankruptcy.

“I recommend that anyone thinking about debt settlement talk to a bankruptcy attorney to see what their options are, especially if they owe more than $10,000,”. “If you do qualify under the new rules to do a Chapter 7 bankruptcy, that could make more sense.”

Changes in the bankruptcy law in 2005 made it difficult for many people to file for Chapter 7 bankruptcy, which liquidates debts. If you have regular income and there is some leftover after you pay basic expenses, then you must go to Chapter 13 bankruptcy, which requires that you pay back some or all of what you owe over five years under a very rigid payment structure.

One way to resolve your credit card debt or other debt is to enlist the help of a debt settlement company. Debt resolution companies often are experienced at negotiating with creditors and may have relationships with major creditors, specifically credit card companies.

The first step in the debt settlement process is for a consumer to reach out to a reputable company that can help. These debt arbitration firms are staffed by credit counselors, people who are accredited in analyzing personal finances. They also have a keen understanding of the current marketplace, including how and why creditors will negotiate debt settlement.


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Credit Card Debt Consolidation 5/5 (1)

Banking always involves the dip of a trick! Whenever it comes to anything monetary, one has to be very tactful and strategic. Borrowing money, comes out to be important and so does the management of the debt. Before we read further about best ways to consolidate credit card bills, you should know few basics.

What is Debt?

Debt is anything or a sum of money that we owe to a lender, i.e. the Bank. It varies from person to person and various Banks have different rates of interests that they levy on these Debts.

How do I use my Credit card?

A credit card is an easy method for payment to the merchant, where the bank issues the payment to the consignee, issuing a deadline for the holder to pay off the borrowed amount, i.e. Debt.

What is Consolidation of Debt?

In case, the customer gets various credit cards issued, he ends up owing money to various banks at various different rates of interest. To get rid of such an inconvenient process, consolidation of credit card bills enables you to consult and borrow one loan from a Bank to payoff all the debts underlying various banks.

11 Tips for Consolidating Credit Card Debt

  • Consolidation starts off with consultancy. Start off, consulting a trustworthy credit card specialist regarding your issues to know the various rates of interest offered by the banks available.

  • Calculate your debt on your own, to assure there has not been any error with the Bank calculations.

  • Choose the best way that suits you to pay off the debt.

  • Enquire about various rates of interest offered by the banks while you borrow a loan or if decide to transfer different debt-balances to one credit card account.

  • Be sure of the limits offered by the banks, to pay off the debt back to the bank.

  • Before taking one of these loans, try calculating all your sum of payments. Make sure, you make a fair deal by opting for the current method rather than paying off the debts individually to each Bank.

  • Choose between the loan you would opt for, whether it has to be a personal or a housing loan depending on your mortgage and the rate of interest offered to be paid.

  • Assure yourself if the debt calculated as consolidated can be paid off by you at the fixed date or no. Tell your preferences to the bank, at times they even tend to reduce the rate of interest for their customers.

  • Try and maintain your credit card score. It always helps reduce the rates of interest levied from the customers.

How Can I Consolidate Credit Card Debt?

Whether you are bothered by piling credit card debt or want to cut down the payments that you make on a monthly basis, consolidation of credit card is the way out.

As per a report by USA Today, non-mortgage credit rose to $3.6 trillion and non-revolving credit grew to $2.50 trillion. It does not matter whether you are having student loans or have a balance on your credit cards, it does have an impact on your daily lifestyle.

The things tend to get worse when various sources are responsible for the debt and you feel the heat in shuffling the payments every month. Such situation does lead to an overwhelming situation, but in actuality you can save yourself from going all through this. You can have salvation from all this agony through credit card consolidation.

Also Read – Credit Card Debt Consolidation For Bad Credit – Few Options You Need To Know

For this, you need to be familiar with the key tips so that you can save your hard-earned money –

Smart Tips To Consolidate Credit Card Debt – [Infographic]

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Knowing What Is Good Debt and Bad Debt

Nowadays, it seems that debt has become an important part of our lives. When the word ‘debt’ is mentioned, majority of the people have a negative illusion about it, but that is not how it should be.

It is an imperative step to analyze what kind of debt you have and accordingly you can set priorities for its payment or want to keep it for your daily needs. On the basis of two important questions, you can take a decision whether the debt is good or bad. You have to ask yourself whether the debt is ‘temporary’ or ‘lifestyle’.

Also Read – Top 5 Credit Card Scams In 2016

Set a goal

When you set a goal, in regards to the payment of your debt, things get a little easier. Choose a credit card, with the maximum APR, such as a secured credit card and increase the amount for which you will be paying. You can opt to reduce lavish spending and going out with your friends, to have extra cash to make that single payment.

When you are off paying to the first card, you can apply the same method to the next card. Repeat the same method till the time you have paid all credit card balances. It is also important that you keep a check, side by side, on the progress and stay motivated in order to meet your targets.

Transferring Your Balance

This tip can prove beneficial if your credit card balances are not too much or you are having a credit that has a large credit limit. The best thing about this is that you no longer have to apply for a fresh credit. If you think that transferring the balances to one single card is not a feasible option then you can transfer small balances in one single card. Owing to this, you don’t have to bear the burden of monthly payments as it will reduce considerably.

All the money that you save via payment of the debts will be much higher as compared to the interest that you will earn on your savings account. You can also use income tax refunds, pay increments or any other form of funds to pay the debts.

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Debt Management Plan

If you don’t possess the expertise to manage your credit card, you can always go for a debt management plan. Firstly, you have to choose a good debt management company to which you will be making a single monthly payment. Your company will further allocate these funds amongst your creditors as per your predetermined plan.

These plans often comprise of low rate of interests which further results in lower payments. If you have decided to take this route, make sure that you have spent extra time to search for a good debt consolidation company. Make sure that the prospective company has experience in dealing with credit card debt issues and does have a license. Such companies also provide consultation and tips for debt consolidation and related issues. Entirely depending upon your situation, you can also make the most of debt repayment and debt relief programs

Paying Small Balances First

When you are making initial payments for small balances, it actually makes you feel good that you are making progress. This will help you to feel good and at the same time motivate you further to keep paying off your debts. There are certain things that you need to consider, they are

  • Monthly payments – Make sure that you are making regular payments for your bills on a monthly basis. This will have a positive effect where it would add up to the amount that you are liable to pay.
  • Paying off your debt sooner – Needless to say that try to get rid of debt as soon as possible. This will further help you in saving money for your future endeavors and your credit card will also get saved from getting damaged.
  • Make changes in cash inflow – Make sure that you have done everything to cut down the size of monthly payments. This will help in lowering down the amount, hence giving a boost to the cash inflow.

Pay and Invest – You will be desperate to get rid of your loan but at the same time you also need emergency funds. It’s not that there is no solution to it but paying off your debts along with making investments can be done. But, your main priority is to pay off your expensive debts first and at the same time save money.

Nobody desires to land up in a situation where he/she will have to face the situation of debts, but in case you find yourself out of luck, the above discussed credit card consolidation will surely come to your rescue.


 

Why should you Consolidate Debt?

Consolidating Debt is a method to step out from juggling various liabilities. Consolidating Debt helps you confine your total debt with one lender. However, consolidating is favorable only where the rate of interest is low.

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*General information from publicly available sources, no credit repair or score services offered.

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Pros and Cons of Your Debt Consolidation Options No ratings yet.

We shall start up with understanding what is DEBT CONSOLIDATION –In simple terms it means to get a single loan to pay all of your smaller loans. The ideology behind debt consolidation is that making one payment every month seems easier to manage & the new loan may result in lower interest rate, lower monthly payment or a combination of both.

Debt consolidation loans are of 2 types:

Secured loans:

Under secured debt consolidation loan borrower can avail the loan amount depending upon the value of collateral pledged against the loan. Secured debt consolidation loan can be availed by anyone who agrees to place some valuable collateral i.e. regardless of their credit history borrower with good or bad can apply for secured debt consolidation loans.

Unsecured Loans:

In unsecured loans, the asset is not required as collateral. If the borrower fails to pay the money of the loan, the lender can eventually obtain a court order in an attempt to recover the money. The added risk for lenders results in higher interest rates. Approval of such loans are primarily based on borrower’s credit score (in addition to income and total debt).

People pitch to debt consolidation by highlighting 3 salient features:

LOWER’S YOUR MONTHLY PAYMENT AMOUNT

By consolidating all the debts they might lower your monthly payment amount but the reality is by lowering the monthly payment it is likely to take longer time to clear the debt.

REDUCES YOUR INTEREST RATES

It might be possible that the new loan may be available at lower interest rate but it often ends up with higher total interest to be paid.

MANAGEABLE MONTHLY PAYMENTS

We get enticed by the idea that instead of multiple we only have to pay one amount each month. But there is lot more in picture which seems unseen.

So to decide whether Credit card Consolidation is a Good idea or not: One must work on planned budget & improve savings & spending habits.

A very famous financial author once quoted-“DEBT IS NOT A PROBLEM; IT IS THE SYMPTOM OF OVERSPENDING & UNDER SAVINGS”.

Get rid of pending debts and liabilities

Debt consolidation is one of the competent ways to get away with your current debts. As per this, all your debts are rearranged into one single loan where the interest rate is on a lower side. If you are striving hard to break out of debt, a consolidation loan will surely deliver you from this situation.

It can also be said that debt consolidation allude to a loan which is, particularly, taken to get rid of pending debts and liabilities. There will only be one single loan for which there will be a single monthly payment.

Related – 13 Carcinogenic Debt Consolidation Myths You Ought To Know In 2017

Pros of debt consolidation 

  • Getting rid of bill collectors – Collection agents can really unsettle your daily schedule, this is where enrolling for a debt consolidation loan can prove beneficial. This will put an end to all annoying calls & letters and you no longer have to deal with the collection agents.
  • Organizing bill payment – With the help of debt consolidation, you get to reorganize your repayment to varied creditors, thus making one single monthly payment. When you have one single bill to pay in a month, you have to care less about making minimal payments to different organizations. Moreover, you get to extricate yourself from remembering the due dates every single month. All you need is to pay a bill every single month and you no longer have to take care of the accruing late or missed payments.
  • Fixing the credit – If you are not able to cope up with the monthly payments of your credit card, there are strong probabilities that your credit rating is descending. While your credit report card may undergo a primary ding, all the negative records of missed payments instantly stops when you enroll yourself in a credit relief program.
  • The prime most advantage of debt consolidation is that all our debts are in one place, so we have only 1 interest rate to keep track of & one payment to make every month.
  • Debt consolidation aids in managing debts effortlessly because you have to make 1 monthly payment to your financial institution, rather than bunch of different payments to different lenders.
  • Using debt consolidation one can also close down other credit cards & loan accounts which will revamp their credit rating by showing lenders that your finances are managed properly.
  • Since the interest rate of the new loan is generally lower than the existing small loans, you will pay less of your money to interest, getting you out of debt faster.

Related – Private & Federal Student Loan Debt Consolidation and Settlement

As and when your consolidation agency receives timely monthly payments, they further update leading credit bureaus, thus helping your overall credit ratings to improve.

  • Constant Instructions – A reputed debt consolidation agency will not only provide you loan so that you can pay off your creditors, instead they should impart information that will help you to make you more responsible towards your finances in the coming times.

You should acquire knowledge of setting up a budget, set financial goals for the coming future and plan an emergency fund by taking guidance from a reputed credit card consolidation company.

Cons of Debt Consolidation 

  • Unjustified Fees – There are consolidation agencies which charge high fees and interest rates are also on a higher side. This will mean that you will use majority of the monthly installment to pay off the interest, thus making it difficult to pay off the debt. The interest rates can also rise unexpectedly, worsening the things for you.
  • Low Interest Rates – Majority of the people are of the view that the low rate of interest will help them to save more which is not correct. Usually the term for debt consolidation loans stretches for a longer duration, this will mean that your total interest payments will amass to pricey debt.

If you think that paying off short-term debts such as personal loans or credit cards over a longer duration, with a lower rate, will be a good idea, think again. In real terms, this actually means that you will have to pay more interest in the future

Related  – Which Are The Best Ways To Consolidate Your Student Loan Debt?

  • Additional debt – Some people have a wrong illusion that debt consolidation is a way through which they can get rid of the debt. Alas, majority of the consumers are of the view that the zero balance is actually a green signal for them to go extravagant while spending. But, all this will only end up making things worse.
  • Cutting down the debt – Debt consolidation replaces current debt with another debt which most of the people don’t realize, so this cannot be a solution for all those consumers who are over-indebted. There are certain things that you should follow for financial well-being – spend less, save money and pay your debts with your money.
  • One of the main disadvantages of debt consolidation is that one might end up paying more interest than you need to on some of your borrowing. Debt consolidation can make debts more expensive and may take longer to pay them off. One must remember when we consolidate debt we end up owing same amount of money but the difference being that the length of the term increases which indicates paying more money through interest.
  • Debt consolidation may reduce your monthly installment & give you short term breathing space but it will result in paying interest for longer tenure.
  • It’s a myth that debt consolidation reduces your debt rather it may lead to more debts by giving you an illusion that the debt is being paid off.
  • If you have used your house or any other valuable asset as collateral you can risk losing it if you are unable to pay the loan installments.
  • Therefore debt consolidation is not a solution for over indebted consumers. In order to get on track of financial well being one must spend less, save for emergencies & pay off their debt with their own money.
  • Next point to be taken into account is that how do you qualify for debt consolidation loan:
  • To see if you are eligible for consolidation loan the lender would examine your credit rating because lending institutions will use your credit score & payment history to determine risk. If borrower has bad credit history or large debts, the borrower may offer a secured loan.
  • The lending institutions also delve into the regular source of income of the borrower to analyze whether you will have enough cash to pay the loan installment after meeting your daily living needs.
  • Lending institutions may need a cosigner for the loan or provide collateral such as house or car, which borrower will pledge as security to ensure he pays back the loan.

Related  –  Credit Card Debt Negotiation – An Expert Guide

Should I choose debt consolidation

At the end of the day, it is your personal decision whether the debt consolidation is right for you or not, if yes than our credit card debt specialists are availaible to you for providing expert advice on how to pay off your credit card debt. Now that you have a fair knowledge of the pros and cons of debt consolidation, you can make decision on your own. All you need is to consider the above discussed information and you cannot go wrong.

Related  – What is Credit Counseling and How It Can Help You Reduce Debt Problems?

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