It only takes one serious financial setback to fall behind on bills. When this occurs, many people prioritize essential expenses such as food, rent, house, and car payments over paying their credit card bills. After all, paying for shelter, transportation, and food comes before paying high-interest credit card debt.
However, delinquent credit card debt can lead to bill collector harassment, lawsuits, wage and bank account garnishments, and liens on your house. This becomes a challenge to function financially and the situation becomes more dire.
What Options Do I Have?
If you are unable to pay off your credit card debt, you do have options. Here are some common debt relief strategies that may help you solve the credit card problem:
Bankruptcy: Chapter 7 bankruptcy cancels credit card debt. Chapter 13 bankruptcy allows you to repay part of your credit card debt at no interest and cancels a portion of your credit card debt. Bankruptcy is an affordable option to resolve credit card debt.
Debt Management: Offered through credit counseling agencies such as Consumer Credit Counseling. This involves a debt management plan that lasts three to five years. Interest rates are lowered and you pay the credit counseling agency who disburses your money to the credit cards.
Debt Settlement: With debt settlement, you negotiate with the creditor or bill collectors to pay a settlement amount that is less than the full balance you owe.
Debt Consolidation Loan: If you have a certain credit score, you may be eligible for a loan which allows you to use the loan proceeds to pay off the high interest credit card balances. The loan will be at a much lower interest rate.
Home Equity Loan: Many people have equity in their home. Consider speaking to a home loan lender to determine if you can borrow against your home’s equity to pay off high interest credit cards.
Falling behind on credit card debt can feel overwhelming.
Explore the debt relief strategies discussed in this article and take action to regain control of your financial life.
