Tag Archives: debtors

Credit Card Debt Consolidation Or Bankruptcy?

Posted by on May 20, 2011 No comments

Although credit cards can help you enjoy a better quality of life, they can as easily get you into trouble if you consistently spend more than you earn. Eventually, you may reach a point when you are overwhelmed by debt and make an active effort to consult with a certified expert in debt management.

When trying to decide the best strategy for debt management, debtors are often offered two choices when faced with overwhelming debt: they can either get a credit card debt consolidation loan or declare bankruptcy. Both methods clear debt completely, offering a fresh start, but which is the best solution?

By looking at each solution in turn and then comparing them against each other, it’s possible to determine the best choice.

Debt Consolidation

Fortunately, there is an alternative, another legal way of getting clear of your creditors and your mounting bills. You can get a secured or unsecured loan that is of lower interest than your credit cards. This loan can be used to pay charge cards, leaving you only with the loan to pay off. Besides paying off your debts in full, your credit scores will have to reflect that you have “paid as agreed.”

All you have to do is provide reasonable proof that you have a steady income and can pay back the loan in a timely manner.

Bankruptcy

This should be considered the choice of last resort. The effects of a personal bankruptcy are long lasting. Although after declaring bankruptcy a court rules that you’re no longer held to your financial obligations, your credit report will show this for ten years. During that time, you can’t apply for a car, a home, and even life insurance. Sometimes, too, it prevents you from getting a job.

The Best Debt Solution

Although both forms of debt management provide the same outcome: a legal release from indebtedness, they do this in completely different ways. With bankruptcy, a court order frees you from further obligation to your creditors. With debt consolidation, a blanket loan frees you from further obligation to your creditors. Bankruptcy ruins your credit report and a debt consolidation loan saves it from ruin. A debt consolidation loan is better provided you can provide proof of regular work. Otherwise, if you have no income coming in and no way of obtaining employment in the near future, then a personal bankruptcy may have to be filed.

Credit Card Debt Elimination Mistake Debtors must avoid

Posted by on June 16, 2010 No comments

consolidatedebts09 asked:

thedebtrelief.net |? Paying High Interest Rate is a clear mistake that most debtors frequently make when frustrated trying to settle credit card debts. To avoid credit card debt settlement mistakes, grab your free report http

Bernice

Will I Be Sued For Credit Card Debt Default?

Posted by on December 18, 2009 No comments

Manshu Verma asked:

The short answer to this is Yes. Even though credit card debt is not secured debt, you can be sued for defaulting on credit card debt and be taken to court.

Once in court, they can garnish your wages. While the rules for taking you to court depends on the state that you are in, generally, most states do allow creditors to take the debtors to court for credit card debt default.

There are several instances where credit card companies have taken debtors to court for credit card defaults of amounts as small as $4000.

What happens if I am taken to court for credit card debt default?

While the specifics depend on your situation, what we describe below is a real life situation that a lot of people have already gone through. So, while most people treat this scenario as the worst case scenario, it is one, that can really occur.

If your credit card company sues you and takes you to court, you will not get a real trial. That means that you will just be asked to verify your identity and asked whether you really incurred those debts. If you answer in the affirmative, then the trial will be over then and there. The judge can ask your wages to be garnished and add the cost of the courts and attorneys to the debts. This amount will then be deducted from your salary every month. As you can well imagine, this becomes a socially embarrassing situation as you will need to explain the condition to your HR department and your coworkers will eventually learn about it.

What is the best thing to do if I know I can’t pay my debts?

If you want to eliminate all chances of going through the hell we described above, call your credit card company and explain your situation.

The credit card companies want their money and they may be willing to freeze your interest going forward and chalk out a payment plan with you. This is very often the best scenario for a lot of people who can’t afford to pay their debts any longer. They may even waive off your fees.

The specifics will depend on your situation, but it is better to call your credit card company and find out your alternatives before stopping payments altogether.

Act Now

If you find yourself in a situation where you may not be able to make payments, do not procrastinate, act immediately. If you wait too long, you may find yourself in a position from which it is difficult to recover. Once you default on your credit card payments, it will go to the collection agencies. The collection agencies make life really difficult by calling up work and home and creating embarrassing situations.

The default will also appear on your credit report and will ruin your credit score.

It is better to avoid all this and act quickly and decisively. This way, even if your situation worsens, you will be fully aware of what is going on in your life and will not be left second guessing on what happens next.

Geraldine

Credit Card Debt Settlement Programs – Criticized But Necessary

Posted by on April 29, 2009 No comments

Hector Milla asked:

Criticism typically rains down from lots of different angles when you bring up debt settlement. The personal financial world is full of options and it is full of opinions. Many people feel that settlement is not a good way to get out of debt, but it can really be necessary for many people. While some of the criticisms have merit, it should be noted that consumers are usually forced to turn to this when they have few other options to choose from. So why do these criticisms continually come and why is settlement such a necessary thing in today’s financial world?

Gauging the criticism

One reason why people are critical of debt settlement is because consumers typically only have to pay a small portion of their debt in order to get out of the hole. This might not seem like the right thing to do in the eyes of many. The problem with this line of thinking is that people don’t typically take into account why consumers owe so much money. For most people who consider settlement, the debt has been growing not because of something they have purchased. Rather, it has come through interest charges, overwhelming fees, and things like that. This is just more profit for credit card companies and the charges can be over the top in many cases.

Why is it necessary?

So why do some people have to turn to settlement for their credit card issues? A lot of it has to do with the money that can be saved. If you have something like $10,000 worth of debt, paying off the whole balance can be outrageous and impossible. If those people have ten thousand bucks laying around, they probably would not be in debt in the first place. If they can settle the debt for half of that amount or even less, then it becomes something that will set them free of the debt chains that they have been carrying around. Anyone can see the value of this type of solution.

For debtors, listening to the criticism is a good idea, but you have to consider your own personal situation first and foremost. If you have been slaving away, paying off tons of interest for years and years, then you have done more than enough for the creditors. You should be able to use credit card settlement without worry to alleviate your debt pain.

Georgia

credit card debt, debt management, credit card financing

Tag Archives: debtors

Credit Card Debt Consolidation Or Bankruptcy?

Credit Card Debt Elimination Mistake Debtors must avoid

Will I Be Sued For Credit Card Debt Default?

Credit Card Debt Settlement Programs – Criticized But Necessary

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