It is true that your credit card debt can truly be erased or forgiven? This is actually the though of many when the hear that word “Credit Card Debt Relief “ . Infact, there’s no such stuff, it’s not in existence and it’s not possible to settle your debt even less than what you owe. In this work we will discuss more elaborate on credit card debt relief and the effects it has on your credit score.
What is Credit Card Debt Relief
This is a process or period that your Credit Card issuers hands you over to debt collection agency for negotiation with them. For instance, let’s say you have $20,000 Credit Card balance and you’re behind payment of your bill say for 6 months. Now, your credit card issuer would have sold your debt to a collection agency for negotiation with them.
Then, you have to agree with the debtor collection company to pay back $15,000 by installation. The amount of debt relief you have received now is $5,000. Therefore, that you are pardon some percentage doesn’t mean that should forget the rest of the debt, though, you may have to pay taxes on it.
How To Avoid Credit Card Debt Collector
There are steps to apply to avoid any debt issues with debt collector. If prompt action is taken as soon as possible, there will be a chance to discuss with your credit card debt issuers before the get in touch with the debt collection company:
Take Prompt Action To Reduce The Damage on Your Credit.
As a cardholders, you know that you would not net up on your bill payment, contact your credit card company on time. Speck with the hardship department and let them know your situation. This might help to grant you an extension and this will minimize your credit score damage. But this can only last for 12 months.
Met A Credit Counselor
At this point, you need to met a credit card counselor. This must be an agency accredited by the National Foundation for Credit Counseling. The counselor can help you with a debt management plan, they said amount can be paid up in five years installments at a reduced interest rate. Debt management plans are offered by non-profit agencies. However, if the issuer company have not yet transfer the debt collection company, this will stand as the best debt relief mechanism.
Negotiate With Debt Collection Company
This one of the options on how to settle your credit card debt relief. Launch out and negotiate with debt collection agency personally, but one need to be very careful on your discussion with them. You need to know your right so as to protect yourself. Based on your current financial condition, you may even negotiate a huge sum payment or make a convenient installations negotiations. This should be documented, go the extra miles to get an attorney to assist you get through the negotiation.
Watch out For Debt Settlement Companies
When using the services of a debt settlement company ensure that they are duly registered for the service the are rendering. Some of these companies engages in deceptive and unfair practices. They charge upfront, claim a new government programs will wipe out your credit card debt or guarantee you a large amount of the debt will be removed. Some will even go ahead of asking you not to make your debt payment straight to your credit card company, this might affect your credit reports and scores negatively. This might makes you have others penalties to deal with, late fees and all of that. Withholding payment for a long term may cause your debts to turn into “collection accounts” therefore, causing more harm and putting you in danger of being sued by the credit company for repayment.
This option is said to be better than debt settlement that requires installment payments that you may be able to manage. One does not need to wait for a longer time to met attorney. You don’t have to see the red flags signal you need to take preventive action. Such as liquidating some of your assets to pay your creditors. Keeping your physical property but making a single monthly payments towards the debts for a period of three to five years. Bankruptcy may give you the convenience platform to pay off your debt but it may also affect your credit for years. Proper research has to be made before you take your decision on filing for bankruptcy.
In conclusion, when faced with the challenge of paying off debt do not kill yourself with thought, take a fast steps by developing plans to sort the issue out. Reach out to your creditors, discuss the debt relief or any repayment plans that might be available for you. Contact a non-profit credit counselor that may be of help. Explore all options, weigh the benefits against the cost, eventually, you may go across a plan that suitable for your debt management.