Credit Card Debt - How to Avoid It

Legislature and Credit Card Debt

admin — Tue, 27 Jul 2010 22:57:18 +0000

One significant reason that Americans look to Bankruptcy relief for help is due to credit card debt. Credit card companies overload consumers with high interest rates and numerous fees. These can lead to large credit card debt very quickly. Bankruptcy becomes the only true option to allow for a fresh financial start. Congress has taken notice of these tactics by credit card companies.

How do I reduce my Credit Card Debt?

admin — Mon, 26 Jul 2010 04:45:23 +0000

I have 50k in credit card debt with interest rates ranging from 7 to 27%. I don’t want to ruin my credit score (675-720) but I need to reduce my monthly payments. If I quit paying 1 card, I might as well quit paying all of them. What are my options?

Settling Credit Card Debt – Negotiating Tips

admin — Fri, 23 Jul 2010 08:57:05 +0000

It is truly sad that more people are not aware that it is very possible to settle credit card debt personally without ever having to deal with a legal representative. If the credit companies that you owe money to decide to take legal action against you, they will charge you with their no doubt costly legal fees.

It would be wise to call the credit card companies yourself and try to work out a settlement agreement with them on a personal basis. The credit card companies really don’t want the situation to progress to the point where they have to take legal action, so they will probably be willing to negotiate even if your account has been delinquent for several months.

Start by trying to adjust your interest rate and lower service charges that have been applied to your account. Once you know what the credit company is charging you, you will be more prepared to negotiate effectively with them on a settlement.

In your efforts to reach a debt settlement with the credit card company you should focus your efforts on negotiating over the interest rate and service charges first, not discussing the principal. The credit card companies make their money off the service charges and interest rates on your account, so try to make a deal that benefits you both mutually.

Next Comes the Hard Part

The money that you spent on purchases that has already been paid by the credit card company, called the principal, is the hardest aspect of your debt to negotiate over with credit card companies. They don’t want to have paid for something and not have you pay them back.

Getting your way with negotiations over the principal is not easy, so don’t feel bad if the credit card company refuses to budge. Even getting the company to adjust your interest rate or service charges is difficult. Remember that the credit card company’s goal is to get their money from you, not repossess your things.

Regardless of what agreement you reach with the credit card company, you need to be prepared to follow through with your end of the deal. If you fail to meet the terms of your settlement plan, you can expect the credit card company to take aggressive action to get their money, not a second chance.

By: W. M. Blake

How do I go about eliminating my credit card debt?

admin — Thu, 22 Jul 2010 07:49:46 +0000

I am 23 with a nine-month-old son, and I owe (on top of my student loans from college) approximately $30,000 in credit card debt. I am looking to do a debt management/consolidation program, but was wondering if I should just contact those credit card companies that say to call them if I have financial difficulties instead? Also, which debt consolidation programs would you refer, if any? Thank you!

Credit Card Debt Consolidation Loans

admin — Thu, 22 Jul 2010 03:44:19 +0000

The term debt management consolidation refers to a process where all of your debt is lumped together with the help of a debt management company. Then they negotiate with your creditors to lower your interest rates, and lower or eradicate your late fees and over the limit fees. They also work out a plan with you that fits your budget to repay the debt. This plan is used to negotiate with your creditors to get them to lower the rates and fees.

One of the best parts of debt management consolidation is that almost everyone can use the service. It does not matter if your credit is or good or bad or even thinking of filing bankruptcy.

The Benefits to Debt Management Consolidation

1. Single low monthly payment for all debt
2. Increased credit score- which enables you to obtain credit in the future
3. Stress relief- Instead of worrying about piling up bills you can rest assured that the plan will work to get you out of your current situation

Now that you are on the right track with your debt management consolidation another very important aspect of the process comes into play: Debt counseling. This is a very important aspect of debt management. They go through with you and go over appropriate management of existing debt and guide you in how to pay them off. Then they go over your spending with you. A budget is designed and they ask you to follow it specifically.

With the economy going through the present slump and the average American barely scraping by, debt management consolidation is becoming a very valuable service. There are many firms out there just search in your yellow pages or online. Just make sure you research a few companies until you find one that you feel comfortable with.

By: Jake Hyten

Debt Management Tips : How to Consolidate Credit Card Debt

admin — Tue, 20 Jul 2010 18:26:23 +0000

Ways to consolidate credit card debt include using balance transfers and contacting a credit union or bank for loans. Condense credit card debt, but read any disclosures regarding balance transfers, with advice from acertified public accountant and credit counselor in this free video on debt management. Expert: Jerrie Guthrey Bio: Jerrie Guthrey has been a certified public accountant and credit counselor since 1992. Filmmaker: Jack Guthrey

Is the SOL on credit card debt determined by the state you currently live in or where the debt originated?

admin — Mon, 19 Jul 2010 03:10:46 +0000

Is the Statute of Limitations on credit card debt, determined by the state you currently live in or where the debt originated?

I have a debt that I stopped paying on in Jan 2002. I acquired the debt while living in Texas and stopped paying it while living in Texas. My husband is military so we have lived in Missouri for the past 4 years.

The SOL for TX is 4 years for open accounts (credit cards) and for MO it is 5 years. Either way, the SOL has run out on this debt, however I am still wondering which would apply to us since we are military? We claim TX as our home/residence.

Thanks!
This debt was sold to a debt collector years ago.

I have known others that have written cease and desist letters so I am not so sure that SOL on card debt is a myth.

How Does Debt Settlement Work

admin — Sat, 17 Jul 2010 09:11:34 +0000

Debt settlement companies exist to help people clear debt, they charge a fee up front and will negotiate with your creditors to achieve much reduced settlement figures that can save you up to 60% of your debt, except that it is never really 60% as you will find out later on. Debt settlement companies always use the same pattern or steps during the settlement process as they are pretty much standard throughout the industry, below is an example of how the settlement process works:

Credit card debt settlement: Example;

A debtor has a debt of $50,000 over four credit cards and is struggling to make even the minimum payments each month. A credit counseling service has already attempted negotiating with the creditors but the reduced payments were still too high for the debtor to pay. Bankruptcy is an option, but the debtor does not wish to go down this route as it will destroy his/her credit rating for at least the next seven years, nor does the debtor want to go to court, which would be inevitable if this path was chosen.

Another option, and the one the debtor opts for, is to work with a credit card debt settlement company who advises that the following four steps are taking in order to get rid of the $50,000 credit card debt:

Refrain immediately from making any further payment to creditors: The debt settlement company asks the debtor to stop paying his/her creditors with immediate effect and instead to start depositing a set amount each month into a trust account created by the company.

Collection calls are passed on: Once payments begin to get behind the credit card companies will start to call the debtor with requests for payments these are effectively passed on to and handled by a representative from the debt settlement company.

Negotiation begins: As money is continually being paid into the trust account, the debt settlement company representative will begin negotiations with the creditors.

Settlements of between 40-60% are acquired one by one: Part of the negotiation process is getting the credit card companies to accept the fact that the debtor cannot afford to pay the individual debts in full and as a result they agree to accept a much reduced amount, often between 40% to 60% of the outstanding debt.

These settlements do not happen all at once, but as they do the debtor is able to pay them off using the money deposited in the trust account. It is important however, that any extra funds the debtor finds are deposited into the trust account also. It is completely possible that this debt could be completely cleared in as little as two years, depending on how successful the negotiations have been.

It is irrespective whether it is a credit card debt settlement program or one that includes other forms of debt the initial thing you should do is to stop paying your creditors and forward payments to your debt settlement company instead, without doing so you risk not having funds in place when an agreeable settlement is offered.

There are certain debts that you can be settled with these techniques and those that can’t as they are excluded from settlement programs:

Debts that can be settled:

•    Unsecured Credit card debt

•    Medical Bills

•    Gas/store cards

•    Personal loans

•    And basically anything credit that is unsecured

Debts that can’t be settled:

•    Tax debts

•    Alimony,

•    Child support,

•    Mortgages,

•    Car loans

•    Student Loans that are covered by federal insurance

How much can I expect to pay for a settlement service like this and how long will it take to clear my debt?

The usual fee that a debt settlement company charges is based upon the size of your debt, the number of accounts that are being settled and the amount you will actually save through the settlement company’s efforts. It usually equates to between 25-35% of the balance that is forgiven by the creditors.

Therefore, if we use the example above and the debtor saved 50% and the settlement company charges 25%, the charge will be $6250. This would mean that the actual settlement saving to the debtor is around 32%.

The whole process can take as little as 2 years but could extend to 4 years, but this is mainly dictated by the size of the debt being settled.

Once my debt is cleared is it really…cleared?

Generally, once both sides have agreed upon a settlement and the debt has been paid off, as per the agreement, most creditors will not pursue you for the remaining balance. However, in certain states creditors still retain the right to sue under certain conditions. It is prudent to find out whether suing after settlement is illegal or not in your state.

And finally, two things are certain in life…death and taxes!

Unfortunately, any proportion of debt that has been forgiven by creditors is called ‘cancellation of debt income’ and under IRS guidelines is still taxable!

By: Daniel Major

Credit Card Debt Solutions That Work

admin — Thu, 15 Jul 2010 16:36:25 +0000

Obviously in order to pay your credit card bill you need to stop spending so much with it. This is an essential part of having a budget. A budget is your best weapon against debt. If you realize in time that your credit card debt is getting out of control and you can manage to stick to a strict budget, you should be able to get out of credit card debt with ease.

This is a good time to cancel all credit cards you can no longer afford so you can stop using them and start paying them off. If you can manage to pay off double your minimum payment your balance on that card will disappear within a couple of months. Another part of keeping a budget is reviewing your credit report from time to time. Checking for erroneous negatives points and fraudulent purchases should be done regularly.

If you’re at the point where it seems like you may never get out of debt I strongly recommend you seek the help of a debt consolidation program. A debt consolidation service will be able to renegotiate with your creditors getting you lower rates and smaller payments. All of your bills will be consolidated into one monthly bill so its hard to forget to send in. Debt consolidation programs will be able to make it easy for you to pay off your debts so you can start saving again for the future. A good debt consolidation service will be able to get late fees and other payments wiped from your credit history and even your current balance.

Although fairly difficult, it is possible to consildate your debt on your own. By paying off all your debts with a single low interest credit card is a great way to cut back on payments and late fees. You can even go as far as calling up the creditors and requesting the the removal of late fees and request to cancel as well. There’s a 50% shot you may be able to get some or all of the late fees wiped from your record. And you can then cancel your cards even if they have a unpaid balance still on them. This way you won’t be able to continue spending.

This takes a great deal of time which makes debt consolidation services such a great deal. A reputable debt consolidation program will be able to do all of this for you for little to no cost to you.

By: Tom Kranz

Credit Card Debt

admin — Sun, 11 Jul 2010 21:49:19 +0000

Credit Card Debt