Tag Archives: declaring bankruptcy

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 Resolution Instead of Bankruptcy – Legally Erase Credit Card Debt

Posted by on March 29, 2011 No comments

Brian Anthony asked:

With the crumbling economy and the unemployment rate climbing, many Americans are faced with the prospect of filing bankruptcy to avoid paying their?debt. Before you call up a bankruptcy attorney and pay thousands of dollars for their services, you need to look into credit card resolution instead of bankruptcy.

There are a number of ways to legally erase your credit card debt without declaring bankruptcy. In fact, many of the systems available to you can slash your debt by up to 90%! These programs work, you only have to know where to find them.

Who Qualifies for Credit Card Resolution Programs?

That’s the great news! Anyone with any amount of debt can qualify for these programs. Keep in mind, that these programs not only slash your debt, but they also can drastically reduce medical bills and other unsecured debt.

Unlike government programs and grants, there are no lengthy forms to fill out of hoops to jump through. You only need to know how to find these well guarded systems.

How Much Does It Cost To Legally Erase Your Credit Card Debt?

The cost of using one of these debt reduction programs varies based on your debt amount and the system you choose. Here are a few of the options you have:

Do It Yourself Credit Card Resolution System: These programs cost between $50 and $100. Each of these programs outlines the steps you need to take and walks you through the process step by step. In addition, the best programs we’ve found have letters and forms pre-written for you by debt attorneys. These programs require a little extra work but are a much better option to choose instead of bankruptcy. Debt Consolidation Companies: There are many companies who provide services to clients that bundle all of their debts together into a more affordable payment. Keep in mind that these systems do not slash your credit card debt, but rather “repackage” it into a different loan with a better rate. While this type of system can be beneficial to certain clients, the idea option is to use a system that legally erases your debt forever. Debt consolidation companies’ fees can vary from a few hundred to a couple thousand dollars. Debt Settlement Companies: Using one of these companies is the preferred way to legally erase your credit card debt instead of bankruptcy. These companies work on your behalf to negotiate with your creditors to drastically reduce and eliminate your debt. A debt settlement company can charge anywhere from under one thousand to over three thousand dollars. While that may sound like a great deal of money, you need to ask yourself how much you would pay to eliminate $10,000 – $30,000 of debt. If you’re willing to pay a fraction of what you owe to slash your credit card debt, debt settlement is the way to go.
How to Get Started:

Getting started with one of these programs is easy. Simply gather up all of your unsecured debt statements and total up your overall obligations. Calculate your current monthly payments and figure out what it would be worth to eliminate that debt forever. If you’re only willing to pay $50-$100, check out a do it yourself credit card resolution program.

However, if you current obligations are significant and you want a professional to help you erase it quickly, look into a debt settlement company to help you out.

Ben

Credit Card Debt Negotiation – Easy Ways to Negotiate Debt Settlement

Posted by on November 3, 2010 No comments

Paul Sarwana asked:

One way of getting out from under all of your credit card debt is through credit card debt negotiation. In this process, you can contact your debtor and get them to settle your debt for a fraction of what you owe.

Though this will hurt your credit rating, it is a far better option than not paying at all or declaring bankruptcy. Those two options will make it very hard for you to get decent rates on future loans and make it hard for you to get a loan period.

Credit card debt negotiation is a very delicate process, involving a bit of give and take from both sides. You don’t have the money to continue making payments over the long term, but the credit card company wants their money back.

The truth is, credit card companies would rather have you pay something and sever the relationship, rather than keep your debt with them, dragging things out with no intention of paying. They don’t want to pay collection agencies to track you down; they would rather just cut their losses.

Many times it can help to employ the services of a debt settlement company through a debt negotiation program, but sometimes you can negotiate with creditors yourself and find positive solutions. If the debt negotiation is successful, it will save you not only money due to reduction in APR but also the hassle that is associated with looking for a new credit card to transfer balance.

If you are negotiating credit card debt by yourself the first thing that you need to do is find a proper mailing address for your credit card company to send all correspondence to. Don’t use the address on your bill, as that is for payment only. Once you have an address that is where you should send all correspondence regarding your negotiations.

Make sure you use registered mail with receipt. This paper trail forces the debtor to honor anything you can verify with mail, as opposed to phone calls, which mean nothing in court, should it come to that.

Also, it is imperative that you stay calm and conduct yourself with professionalism during credit card debt negotiation. Your debtor may try to verbally bully you, but don’t fall for any of the old tricks. Simply express your desire to settle your debt, no more, no less. Don’t include any personal information, such as why you want to settle, as that will likely get you denied.

In the end, you simply need to realize that although you got yourself in this situation for whatever reason, there is a way out. Systems have been put in place for situations such as yours; you just need to avail yourself of them. Regardless, it doesn’t hurt to call up your credit card company and ask, just make sure you follow up that call with registered mail.

Adrian

Resolving Credit Card Debt Without Debt Settlement Or Declaring Bankruptcy

Posted by on September 15, 2009 No comments

Jeslyn Jessy asked:

Debt settlement, credit counseling and filing bankruptcy are the 3 most common financial solutions people usually apply when they are knee deep in debt. However, these 3 methods have negative impacts on the debtors’ credit. In order to protect the credit score, you are recommended to consider other alternatives.

In order to eliminate your outstanding balances, there are few ways to raise fund. Firstly, you can consider obtaining financial assistance from someone you know. You can borrow money from your friends, relatives or colleagues. If you are attached to a company, you may consider getting company loan from your employer. The interest you need to pay for friendly loan is usually very low.

Secondly, if you can’t manage to get personal loan, don’t worry, think about consolidating all your debts into one single loan with lower interest rate. There are many loan providers in United States which offer different types of consolidation plans to people in debt. You are advised to obtain the loan to clear all your existing debts. Then focus on ONE repayment on the new loan.

Thirdly, are you a tax payer? For those tax payers whose income took a hit last year, most probably you can entitle for larger tax refund this year. According to the statistics, every American is able to get back USD 2, 700 refunded from their income tax in average. What are you still waiting for? Act now! Grab the tax refund and reduce your outstanding.

Fourthly, look for ways to raise additional cash. You are encouraged to look for opportunities to get part time jobs like babysitting, writing articles, becoming sales person, etc. If you have many luxurious items or unnecessary items at home, you are suggested to sell them off first. Put the priority on clearing the debt. Besides, if you possess real property, you may consider refinancing your house. At the same time, it is necessary for you to cut down your daily expenses to save more money for your debt. Work out a monthly budget properly by cutting down the spending on entertainment and shopping. Follow the budget strictly so that you can really raise more cash for yourself.

Fifthly, are you an insurance policy holder? If yes, do you know that you can in fact build cash through your plan? What you need to do is to place an expensive cash value insurance coverage with a low cost term plan. By doing so, you can have more cash on hand because you are paying lower premium.

When you are drowned in debt, don’t be panicked. Use your creativity to come out with great options to resolve your debt issues.

Rex

What is the best way to payoff my credit card debt?

Posted by on September 10, 2009 10 comments

sundrop_rulz asked:

I currently have around 10,000.00 dollars of credit card debt on three different cards. I am paying 29.99% on two of them, and 22.99% on the other one.

I have tried to get a card with a better rate to transfer my balances to, but the issuers won’t give me one because I am using so much of my available credit now. I have not had any late payments on my credit accounts, tho.

Should I try to get a home equity loan to pay off the cards, or is that a bad idea, too?

I know that I got myself in this situation, and I am wholly responsible. I do not feel right about declaring bankruptcy, but really want to get out of debt somehow.

If I am unable to get a lower rate, then I don’t see a way to rid myself of the debt. Any advice?

Nathaniel

credit card debt, debt management, credit card financing