Credit card debt has a way of creeping up on you. This is particularly true if you’re having cash flow issues and making minimum payments. This can make paying off credit card debt take a long time—and it’s expensive, too. There is some good news in all of this though. Even if your cards are maxed out, there are a number of different types of credit card debt relief that can help you get things back on track.  

Credit Card Debt Relief Strategies 

If credit card debt has you so frustrated you’re wondering, “What happens if I don’t pay my credit cards?” The good news is there’s no such thing as debtor’s prison in America.  However, you can be sued, so doing nothing is not a good idea if a debt collector contacts you regarding unpaid credit card debt.  

Plus, there are several credit card debt relief strategies you can use, some of which don’t require paying the full amount you owe.  These include debt consolidation, credit counseling, debt management, debt settlement and filing for bankruptcy.  

Debt Consolidation  

At first glance, the idea of taking out a loan to pay off your credit cards might look like digging a deeper hole for yourself. However, getting a debt consolidation loan big enough to encompass all of your credit card debt—or as much of it as possible—can actually make it easier and less expensive to pay off.   

Combining all of your debt into one loan, ideally at a lower interest rate, could give you fewer monthly payments to make each month and save you money in interest charges. The catch is that you’ll likely need a good credit score to get the best interest rate possible. In other words, you have to take this step before the debt drags your credit score down so low that consolidation won’t make sense. 

Credit Counseling  

Sometimes all you need to do to make credit card debt manageable is shift some things around in your monthly budget. A good credit counselor will review your finances for ways to accomplish this. In addition to advising you about managing your money and debts, credit counselors can help you create a budget, get copies of your credit reports and organize a debt management plan. 

Debt Management  

Things can sometimes be so far gone that rearranging your finances isn’t enough. That’s when a credit counselor might recommend a debt management plan.  Under this approach, your credit counselor will contact your lenders to try to get them to waive any fees that have built up, lower your interest rates and adjust your monthly payments to make the debts easier to repay.  

You’ll then send the money you were putting toward your credit card payments to the counselor, who will apportion the funds between your creditors, based on the agreements they reached. The upside is (potentially) less debt to repay; the downside is surrendering control of your finances to a third party. 

Debt Settlement  

This works a lot like debt management, in that you’ll stop paying on your credit debt directly. Instead, the debt settlement company will negotiate with your lenders on your behalf to try to get them to forgive as much of the debt as possible, in exchange for a single payment in full of the agreed-upon amount. 

You’ll deposit money with the settlement agency each month to build up the cash needed to fund the settlement agreements. The agency will present you with the offers from your creditors and make the payments when you approve the deals and have enough cash built up to satisfy them. The thing to consider here is that your credit score will likely take a hit during the period of time that you aren’t paying creditors. 

Bankruptcy 

Chapter 7 bankruptcy has the potential to erase many (but not all) types of unsecured debt, including credit card balances. However, it’s important to understand the consequences before considering this option. 

If you stop paying your credit cards and file for Chapter 7 bankruptcy, your credit score will likely drop significantly. This can make it difficult to qualify for loans or open new lines of credit in the future. On the other hand, filing for bankruptcy can protect you from some of the more serious consequences of unpaid debt, such as wage garnishment or a court judgment resulting from a debt collection lawsuit. 

In Summary 

These are the most common types of credit card debt relief. It should be noted that each approach has its advantages and disadvantages. A good first step toward getting the right kind of credit card debt relief for you is contacting one of the debt professionals at National Debt Relief . You can get a free, no-obligation consultation to help you determine which of these credit card debt relief strategies might work best for you.   

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