If any of following statements apply to you, you may be in need of
credit card debt relief .
You don't have any savings.
You lose sleep thinking about your debt.
You barely make minimum payments on your credit cards.
You get calls from debt collectors.
You're afraid to look at your statements each month.
On the same token, you have no idea how much you owe.
You use credit cards for things you should buy with cash, such as
groceries, gas, or utilities bills.
Your debt is putting an added stress on your marriage.
Your credit card debt to income is at or near 20 percent.
You have more than three major credit cards.
You lie to your spouse or other family member about your spending or
hide credit card statements from family members.
After you pay your credit card bill, you increase your balance by
the same amount (or more) the following month.
You're at or near your credit limit on your credit cards.
You write a check hoping that you have enough time to make a deposit
before it clears.
You take out cash advances on your credit card to pay other bills.
You've been denied credit.
If you lost your job, you would have no ability to keep your head
above water before finding another one.
What we do---Debt Settlement as a form of Credit Card Debt
Debt settlement involves negotiating with credit card companies to
lower the amount that you owe. It is an aggressive approach to
credit card debt relief, and some consumers may be able to settle
their debts for less than they owe and achieve the goal of being
debt free on their credit cards, assuming they successfully complete
the program and each of their accounts are settled. Clients will
enjoy one, low monthly payment to the program. It may be an
appropriate debt relief solution for consumers who owe a lot of
money on credit cards and are barely able to afford the minimum
monthly payment or have already fallen behind. In many cases, it is
the cheapest and fastest debt relief option other than bankruptcy.
For information about our debt settlement savings estimate follow
Credit Counseling as a form of Credit Card Debt Relief
Credit counseling involves working with credit card companies to
lower interest charges. With consumer credit counseling a consumer
is debt free in 4 to 5 years and able to save money on high interest
credit card charges. It may be appropriate debt relief option for
consumers that are paying more than the minimum payment on their
credit cards, but are still bothered by high interest charges.
Debt Relief with Chapter 7 Bankruptcy
Chapter 7 bankruptcy is considered a last resort of most consumers
because of the severe credit implications. That being said, for
consumers who owe a lot on credit cards and do not have an adequate
income stream, then this may be a suitable debt relief alternative.
In a Chapter 7 bankruptcy, a debtor liquidates non-exempt assets of
value and pays the creditor with the proceeds from their sale. For
consumers who do not have any assets of value or ones that are
exempt in their state, they do not have pay the credit card
companies anything. In many cases, Chapter 7 bankruptcy is the
fastest and cheapest credit card debt relief option available.
Debt Relief with Chapter 13 Bankruptcy
Chapter 13 bankruptcy is considered by some to be the worst credit
card debt relief option for consumers because it has all the
negative credit implications of a personal bankruptcy filing, but
you still have to pay back at least a portion of the debt. In a
Chapter 13 bankruptcy, you may have to turn over your disposable
income to the courts for up to 5 years before you are finally
relieved of your obligation to pay back the debt, and it is widely
used as a debt relief solution for secured debts like mortgages and
automobiles, not credit cards. One should always speak to a licensed
attorney to determine whether bankruptcy is a suitable option for
Credit Card Balance Transfers
For consumers who have not already exhausted this debt relief
option, credit card balance transfers may be a suitable alternative.
That being said, many consumers need to be wary of falling into the
"robbing Peter to pay Paul" syndrome, which can worsen one's
situation considerably. In order for the balance transfer to work
properly, one must investigate any hidden charges associated with
it, as well as the term and offer related to the promotional offer.
That is, if the credit card transfer is going to involve a lot of
charges added onto your balance, the interest rate will be too high,
or the promotional period is too short, then you may be better off
finding another debt relief option. If you do find a suitable
balance transfer offer, then it is important to sufficiently budget
so that you can ensure that it will work out.
Using your Home Equity for Credit Card Debt Relief
A home equity loan may be an appropriate option for consumers with
high credit card debt. The interest rate is normally reduced since
it is secured by your home, and you can write off a portion of the
interest charges on your taxes every year. The downsides of using
your home equity as a form of credit card debt relief comes from the
fact that it requires no behavior modification, and over spenders
who consolidate credit cards with their home find themselves in a
similar situation just a few years later. Moreover, by shifting an
unsecured debt into a secured one, you could lose your home if
something comes up down the road and you are forced to miss a
Liquidating your IRA to Pay Off Credit Card Debt
Given the fact that there are so many
debt relief options available
and the real costs associated with doing this are so high, this may
not be an advisable tactic to reduce credit card debt. Not only
would you be taking money that is meant to be available for your
retirement, but you're tapping into a source earning income tax
free. When you add in the fact that your money in an IRA is
compounding and there are so many debt relief alternatives for
credit cards, many financial experts suggest steering clear of this
option for many people. Moreover, if you're under 59 and ? years of
age, then you will have to pay a penalty for early termination.
Borrowing against a 401(k) as a Credit Card Debt Relief Solution
Much like borrowing against an IRA, this debt relief solution may
not make sense for consumers. For one, you end up repaying the loan
in after tax dollars. In other words, assuming you are in the 28
percent tax bracket, it would take earnings of $416 in order to make
a $300 payment to the loan. Moreover, unless you repay the loan or
are 59 and ? years or older, then you will be subject to state and
federal income taxes, as well as an early withdrawal penalty.
Liquidating Assets to Pay Off Credit Card Debt
For consumers who own a lot of property like boats or real estate,
this may be a suitable debt relief solution for paying off credit
cards. However, many consumers only have assets that they need, like
their home or vehicle. Also, if you do choose this route for debt
relief, be sure that you get a reasonable price for your property.
You would not be the first overly anxious debtor who sold their
property below market value in a rush to pay off credit card debt.