Settle Debt Credit Card – 3 Steps to Settle Credit Card Debt
When it comes time to settle credit card debts, many people don’t know where to start. The reality is that there are a number of questions that need to be answered. First, you need to know if debt settlement is even the right option. Next you need to consider whether you’ll settle your credit card debts by negotiating yourself, or to seek a debt settlement agency. There are also other questions that may come up.
In this article we will cover the steps you need to take to determine whether debt settlement is right for you, and then move along with your plan to settle the credit card debts you currently carry. It may feel like the burden of debt is too much and you’re constantly running from your creditors, but there are simple ways to reduce and overcome those debts.
One thing to note before we move on: Whether you think you can negotiate your own debts or not, most of us simply aren’t good enough at it. Even though it may involve a small fee, our suggestion is that you always seek the help of a qualified debt relief company such as those featured on our home page.
Settle Debt Credit Card – Step 1 Calculate Your Debts
Your first step in working towards a credit card debt settlement is simply to calculate your debts. Find the balances of all of your unsecured debts, not just the credit card debt, and then add up all the figures.
Unsecured debt refers to anything where the creditor does not hold something as collateral. For example your American Express card is an unsecured debt. The same can be said about that personal loan from the bank (assuming you didn’t put up collateral for it).
On the other hand, a mortgage or auto loans are considered to be secured debts. If you default on your mortgage the lender can take your house, so the house itself is considered security. Â By the same token if you default on your auto payments the lender will simply take your car.
Settle Debt Credit Card – Step 2 Consider Your Options
After you know how much money that you owe, it’s time to consider your options. Assuming you’re stuck, and there’s no way you can meet your monthly payments, there are really three options to be considered:
- Bankruptcy – This should be considered to be a last option only. Bankruptcy will follow you for the rest of your life, and even though you may think it doesn’t – it does cost money.
- Debt Consolidation – If you have less than $10,000 in debt you might consider taking out a consolidation loan. This type of loan simply puts all of your debts into one reduced payment. For most people this is a good option if you have a smaller amount of debt (under $10K).
- Debt Settlement – For those with more than $10,000 in unsecured debt the best option is usually to seek out a debt settlement plan. This type of plan reduces the balances owed to your creditors, but still requires a (smaller) monthly payment. This option is better than bankruptcy because it won’t affect your credit to the same degree, or for as long, and it is usually over faster than a consolidation loan so it’s a much better option for those with a larger amount of debt.
Settle Debt Credit Card – Step 3 Find Your Solution
Once you’ve decided on an option it’s time to find your solution. If you had under $10,000 in debt you may want to simply visit your bank and apply for a loan. If you determined that a settlement plan was a better alternative for you, then you should seek the services of a qualified debt settlement company. If you need help choosing, you can always find the top 3 debt relief programs on our home page.
