Credit Card Debt Solutions that Work

Credit Card Debt

Credit Card Debt Solutions that Work

When you are in credit card debt, it is all too easy to let the situation spiral until you are completely avoiding addressing the issue. However, there are a number of credit card debt solutions available. If tightening your purse strings and reworking your budget just isn’t working, consider these debt relief options if you qualify.

Debt Relief Counseling

You can seek debt relief counseling, but it bears mentioning not all of these agencies are completely altruistic in their practices. If a debt relief counseling agency wants to charge large fees to help you get out of debt, you may want to seek advice elsewhere. The Department of Banking and Finance does not regulate debt relief counseling companies but can provide limited guidance.

Accreditation and certification can help you choose a reliable debt relief counseling agency. You may wish to opt for agencies which are a member of either the National Foundation for Credit Counseling or the Financial Counseling Association of America. Also consider whether the agency charges a fee for their services and the access options they offer—such as in person, over the phone, or online.

You will receive structured advice on budgeting and managing your debts, as well as bankruptcy counseling if you are in the process of filing. Bankruptcy counseling involves acquiring two certificates: one is required before you file and another is submitted after you file bankruptcy and before a discharge of debts is entered.

Credit Card Debt Settlement

You can pursue credit card debt settlement, which may allow you to pay back a portion of the total amount owed. Creditors are often prepared to accept these agreements in the knowledge they are guaranteed to recover at least some of the money they may have otherwise lost.

Before volunteering to pay any amount as part of a credit card debt settlement, first find out if you are actually obligated to pay the debt. If the statute of limitations on collection has passed, the credit card company is no longer able to pursue the debt under the law. Make sure you get any settlement in writing verifying that you are released from any remainder of the debt. Be aware that you may be issued a 1099 for cancellation of debt, which may be treated as taxable income and could cause you to owe taxes. Consult with an accountant prior to a credit card settlement.

Consolidation Loans

For some debtors, a consolidation loan can help with managing credit card debt. You can pay off your credit cards and instead pay one monthly sum. This may help you avoid issues, such as missing individual payments, as there is only a single payment to think about. If you do your homework, you should also be able to find a better overall interest rate on what you are paying back.

When considering consolidation loans, always ensure you read the terms of the loan carefully. It is important to avoid ending up in a position where you wind up in more debt due to hidden fees and charges. A consolidation loan with a great interest rate may only be available by securing the loan against asset collateral, which puts that property at risk if you are unable to keep up with payments.

Bankruptcy may be an option if a consolidation loan is not preferred. Depending on your circumstances, you may be able to discharge credit card debt with little or no payments on that debt. Even if you pay a portion of the debt, typically no interest is paid to credit card debts.

Debt Solutions that Work

The reality is credit card debt solutions depend entirely on the individual circumstances of the debtor. You can consult with the experts from H. Lehman Franklin P.C. to seek advice on managing or reorganizing your finances by calling our offices today at 912-764-9616 or email us at