If you are having problems paying credit card companies there are several things you can do. One option to reduce your debt is to negotiate with your credit card companies, seeking debt relief through the courts or a debt consolidation company is another. You can also get a new credit card to consolidate several cards into one smaller monthly payment.
Use the FREE credit card chaser at the bottom of this page to search for credit cards with low interest rates or credit cards you can transfer balances to now!
Whatever method you choose to use when you are having problems paying your credit card bills, remember that you are responsible for the credit card debt you have accrued.
What is debt negotiation and how do I do it?
Simply put, you talk with your credit card issuer and ask if they can work with you to enable you to pay your debt. They may have a financial hardship program that will reduce your monthly payment for a certain period of time. They may allow you to pay the minimum interest each month with nothing applied to the principal amount you owe on. This is a good alternative in the short term, but in the long run that principal amount must be paid down to reduce your credit card debt problem.
You can also ask them to waive late penalties or fees and request a reduction in the interest rate you are paying.
Stress that you are having difficulties, but acknowledge your debt to them and your desire to pay it off.
It is important to talk with them early on, before you are many months delinquent when they may not be inclined to work with you. Acknowledging your situation and asking them to work with you will always have a more positive outcome than waiting for the bills to pile up.
How can I find and use a debt counselor?
The National Foundation for Credit Counseling (NFCC) is a good nonprofit organization that can help you eliminate credit card debt problems. They may suggest a Debt Management Plan (DMP), which will allow you to restructure your debt and repay your debts under new terms that are more favorable to you.
One of the good thing about such agreements is that as long as you stay current and up to date with any new payment schedule agreed upon, your credit report will be not be adversely affected. They will report you as on time and in good standing to the credit reporting bureaus.
Can filing bankruptcy solve my credit card debt problems?
The effects of such a court ordered discharge of your debts last a long time and will reflect in your credit report and affect your ability to secure credit in the future.
Filing bankruptcy may solve credit card debt problems in the short term, but remember that bankruptcy should be a last resort alternative and it can’t change spending habits.
Chapter 13 and Chapter 7 are the two options for personal bankruptcy and are filed in federal bankruptcy courts. You should plan to spend a couple of hundred dollars in court filing fees in addition to any attorney fees you may incur.
Chapter 13 bankruptcies involve a repayment plan agreed to by the parties involved and approved by the court. Property such as homes and cars are protected, and if the payment schedule is fully paid on time, typically three to five years, you will be given a discharge of your debts. Using this plan, you may be able to file again in as little as two to three years.
Chapter 7 bankruptcy is a bit harder on the person owing money because some property will be sold to pay off a portion of the debt. Your home may be repossessed or sold by court order. Other assets, such as furniture and cars, will likely be exempt and you will be allowed to keep those. You will not be able to file again for eight years under a Chapter 7 bankruptcy. You can visit the United States Courts website for more information.
What about a balance transfer credit card?
Many people use a new credit card to consolidate credit debt by combining the amounts owed on several credit cards into one card with a single monthly payment. The new card should have a monthly payment that is lower than the total of the other cards combined. It is important to find a balance transfer credit card with the best rate that will fit your needs.
Use the FREE credit card finder and find credit cards to help you manage your finances!
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