Options to Eliminate Credit Card Debt

Like most Americans, if you are fighting a huge debt of credit cards with high interest rates, you suddenly is becoming difficult to meet minimum monthly payments. Financial problems can affect not only your stress levels, but also your health, family relationships, friendship, and even labor. When confronted with financial dilemmas, they can seem insurmountable, but the truth is that they are not. The most important thing is to find a solution to the problem, requesting help from family, friends, or the best, professional advisors. For those seeking professional help with credit card debt, there are three main options. When you have help from an expert, you can access any of these three options.

1. Bankruptcy

Although necessary in some cases, the most radical and negative for your credit score is declared bankrupt. This is a legal process during which a judge or erase the debt or arrange a payment plan for them. The two types of bankruptcy are Chapter 7 and Chapter 13. Filing for bankruptcy has a very negative influence on the credit rating making it almost impossible to access to credit for many years. In addition, the bankruptcy would stay on your credit history for at least 10 years, but they may ask about it for the rest of his life.

2. Consolidate debts

This is the option with which you choose to consolidate multiple debts into one debt, often with an interest rate much lower. If you have one on your home equity, you can request a loan on that value to pay off their credit card debts, keeping only the mortgage loan at low interest rate. The other, more common option is to hire a consolidation company that is responsible to achieve lower interest rates and develop a payment plan that meets customer needs. This type of program requires a monthly fee, and also extends the payment of debts within 5 years, which means that in any case you will pay a lot of money on interest. Finally, these programs do affect the credit rating for the entire process of almost 5 years from now, will resume the process of healing credit activity.

3. Debt Negotiation

A more aggressive tactic to consolidate debt negotiation is thus trying to negotiate an agreement with a reputable company to ensure that debt is settled for an amount less than the current balance of the card. Negotiating a professional company can achieve average savings of 40-65%. This option may decrease initially much more consolidation credit rating. While the initial effect is more severe, the rating increases after the first agreement is reached, which can be from four to six months. In addition, this type of debt settlement programs last only 2-3 years, almost half the time that a program of consolidation and have a much more significant net savings to the consolidation.

This brief summary of the options to confront the credit card debt will help you learn about possible solutions that need to counteract the effects caused by the debts of their credit cards. However, the best thing you can do is access professional financial advice to understand the options further. Only then can achieve financial independence is sought.

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