Sunday, May 29, 2011

Useful Tips and Tactics on Eliminating Your Credit Card Debt

There is no doubt that debt is destructive. Debt can be a big source of stress and anxiety in a person?s life, but you can use a few simple strategies that will help you begin the process of getting out of credit card debt. It destroys lives and families. Every week, the government released grim reports and grimmer statistics that point to the toughest time for Americans since the Great Depression. If you?re one of the millions having financial difficulty you?re certainly not alone. 65% of Americans are in serious debt and need a viable and safe debt relief solution. That?s why many consumers turn to attorney debt negotiation professional debt help.

The first and most important step is to stop using your credit cards. If you are going to tackle your debt without the help of an outside service, you are going to call all of your credit card companies and ask them to lower your interest rates. Let these companies know that you do have alternatives, if they are not willing to lower the rates.

Believe it or not, credit card debt affects only one third of your credit score altogether. If you have a great deal of credit card debt this should be a priority as well.

In order to eliminate your debt, you must make some key decisions and develop a plan of action.

Admit that you are in debt, and possibly over your head, and want to get out of debt once and for all.

The target is to pay off all of your the credit cards as soon as possible. The banks are sucking you dry by collecting interest and late fees.

Before you stop paying on your credit card bills, you need to have the answers to these questions because they will help lead you down the right path. Should you call your credit card company and ask for a lower rate? Should you get help from a credit counseling company or debt consolidation company? (Some are reputable; others are not; never pay an upfront fee). Should you seek legal help? Can you get out of debt by yourself without a lawyer? What if I just stop making credit card payments? (If you don?t settle then eventually you may get sued and have to go to court.

Everyone?s circumstances are different, but my general recommendation for the best option to deal with debt is to try to settle it. You contact your creditor in writing and offer cash settlement of about 10% of the outstanding balance.

While it?s always recommended to try a do-it-yourself debt relief solution first and foremost, some people will eventually seek the assistance of a professional firm. When you are conducting a credit card debt negotiation, its important to know that you are negotiating for a position of strength. The credit card companies don?t want you to default. They make their money by receiving consistent payments from you. If you?re polite, professional and firm, you will get what you want.

Most people can find a least $100-$200 that can be eliminated from the monthly spending to be used for extra credit card payments. Every little bit will help.

Carry on negotiating with each creditor until you have a response in writing that they will accept a certain amount by a certain date. Then mail a check for the agreed-to amount to the creditor by certified mail, return receipt requested, so that you can prove it was sent by the agreed-to deadline. Also be aware that the IRS considers forgiven debt to be income. So if you settle a credit card debt of $10,000 for $4,000, the credit card company may send you a Form 1099 for $6,000 and you may have to pay income tax on that.

Unless you have the cash, don?t buy it. If you want to get out of debt, you have to change how you spend money and the best place to start is to not borrow money to buy stuff you don?t need. If you feel like you cannot get out of debt on your own, begin by consulting a nonprofit credit counseling company. They have a number of debt relief sources available and have options for most any financial need. Their most common debt management plan consolidates all of your unsecured debt so that you are making only one payment each month. This option does not require good credit, a loan or home ownership. You can be out of debt in less than 5 years. Get a free quote for credit card debt relief today!

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