May 20, 2009
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Credit Card Debt: The Options, Pt.4
When all else fails...DEBT MANAGEMENT: If you don’t believe you have the discipline, patience or time to do it yourself, there’s still some good news. There are agencies that specialize in situations like this. They’ll actually make the credit card payments for you. (Of course, you have to pay them first.) That’s not all. They’ll go even further. In addition to setting up a regimen for you and keeping you on track, they’ll even work out deals with your credit card lender to lower your interest and protect you from penalties and other surprises while keeping your payments to a level you can afford. If your debt is high, the savings can be significant. For their $25 monthly fee, this can still be a very good deal and your credit card will get paid off.
DEBT SETTLEMENT: Notice how we’re moving toward the lesser and lesser good deals. If none of the options we’ve covered so far fit your bill, you may need to consider debt settlement after all. Again, there are a few good ones out there. Just beware of deceptive clams and practices. Know this, some credit card lenders are actually willing to forgive 70% of your debt. Your credit will be ‘blackened’ for 7 years and you’ll have to pay tax on the amount forgiven. But if your credit card debt is out of control, this might be the best choice for you. Try to avoid being dragged into up front fees and shady long-term commitments.
BANKRUPTCY (the end of the road): Notice how this isn’t the first choice on the list. For those too far gone to recover with any of the other means, this is still an option (a good option for some). Yes, you can be forgiven all your debt (in some cases). There is no free ride however. You can abandon all hope of getting and new loans with good terms for a while. The Class-A Derogatory will stay with you for at least 7 years. In the meantime, you will probably still be hounded by collections. You can’t have run up serious credit card debt in the last 90 days and you can’t have made large extravagant purchases within the last 90 days. Most of the disposition will be in the hands of a judge who has already tried so many of these cases, there are no tricks left unturned.