Get out of Credit Card Debt
Personal credit card debt has turned into a serious financial issue for literally huge numbers of people in the United States. Your credit may already be suffering and you may believe your only option is bankruptcy if you find yourself mired in credit card debt. However, there are debt solutions available that will actually help your credit score and will allow you to dig your way out of debt in a relatively short amount of time. So, it is possible to get rid of credit card debt without hurting your credit score right? Continue reading for a couple moments...
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Debt Relief Options
There are numerous debt relief possibilities for people with personal credit card debt problems, many of them good and some of them not so good. Options include debt settlement, debt consolidation and bankruptcy.
Settlement
Debt relief is really a negotiation process together with your creditors by which they accept to a payment agreement that provides you with relief from your debt for them. Debt relief agreements are frequently comprised of a mix of elements, including removal of accumulated fees, reduced or eliminated interest and reduced balance amounts. Payment of a debt settlement agreement can take the shape of just one lump sum payment or a number of smaller payments. You just pay a small fraction of what you owe.
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Consolidation
It can make paying off your debts more manageable, though debt consolidation does not eliminate your credit card debt. These loans are often expensive and can actually make your financial problems worse, even though people are familiar with debt consolidation loans. In case you have less-than-perfect credit it will be hard to be entitled to a minimal rate consolidation loan that will provide you with a lesser payment per month. You are able to consolidate debt using a second mortgage or home equity loan yet you will need good credit to qualify.
Bankruptcy
Bankruptcy is probably the solution of last resort for most of us. If you have income and fail the Chapter 7 means test, bankruptcy laws have changed over the past several years and you will be required to pay at least a portion of your debts. Bankruptcy can damage your credit for up to 10 years, rendering it difficult so that you can buy a home or car and substantially increasing the rates you have to pay for insurance. In some instances, a bankruptcy can stop you from getting a job or automatically disqualify from professional licenses, dramatically impacting what you can do to aid your loved ones.
Affect on Credit Scores
The majority of people who are searching for financial methods to their credit card debt happen to be having troubles making payments. You might find yourself tearing the hair out every month, attempting to keep a record of multiple charge card payments and looking for the money to pay only the minimum payment. This rules out using the traditional debt reduction methods like the debt avalanche or debt snowball.
If you are faced with unemployment or other unforeseen events that have decreased your income substantially in the past few years, you are not alone. Unfortunately, missed payments, late payments as well as a high debt-to-income ratio can have a devastating impact on your credit history. If you have missed payments and maxed out charge cards you might have done the majority of the damage already to your credit score.