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Debt Relief – Insolvency – Bankruptcy Information » Credit Card Consolidation, Debt Relief » Nail Your Debt with Credit Card Debt Relief Options

Nail Your Debt with Credit Card Debt Relief Options

Unpaid debt often leaves a person with a combination of overwhelming feelings that can literally send his or her life spiraling out of control. As stressful and overwhelming it can be there are a number of credit card debt relief options that could help you save money and in turn get you out of debt. Most importantly to make any credit card debt relief option work, you are advised to stop accumulating any new credit card debt and use the credit card wisely. As with high interest rates, high monthly payments, large credit lines, and late fees a credit card can dig a person deeper into debt.

To attain freedom from debt, different common types of debt relief options are available like roll up strategy, debt consolidation, consumer credit counseling and debt settlement. It is advisable that you understand the different methods and see which option will work to your advantage. Certain debt relief options may prove more effective for some people than others due to individual financial circumstances.
Instead of paying only the monthly minimums, it is possible for you to pay off your debt through a planned repayment, known as roll-up strategy. To effectively use this method, you may need to cut down on your expenses and make a budget that will forbid you from over-spending. You will be making your regular payments to your monthly debts but the extra cash saved from cutting down your expenses will go towards paying your highest interest account so that you may be able to pay it up as soon as possible. If you continue doing this for each of your accounts; you may possibly become debt free without any assistance from third parties.

But if you are not able to manage your debt on your own you may opt for a debt consolidation loan. You may either take up a secured debt consolidation loan which is obtained against collateral like your home or a car or you may use a debt consolidation service. A secured debt consolidation loan means you are probably getting a lower interest rate in comparison to your high interest rate credit card debt and the debt is spread over the term of your mortgage as it is secured against your home. It is tax deductible. However, the downside to this is that you may risk losing your home if you are unable to service the second mortgage. Furthermore, mortgages are long-term loans so it may mean the monthly payment could be lower but at a cumulatively higher cost as it spans the term of your loan and hence it may take you longer to achieve financial freedom. In the second option, you get a debt consolidation agency to help you consolidate your debts into one single payment. The agency will negotiate with your creditors and arrange a payment schedule so that you only pay the agency while they will settle with your creditors.

Another option of debt relief is credit counseling which typically involves using the services of credit counselors to negotiate a settlement with your creditors and establish a debt management plan (DMP). A DMP is made in such a way that it helps you to budget your expenses and get debts into manageable amounts. The credit counselor contacts each of your creditors, and works out a plan where you repay your debts over a three to five year period. Often they can negotiate a plan where your repayments are made with little or no interest, so you can repay your debts faster.
You may search for a reputable debt settlement firm to help you negotiate credit card debt. These firms will negotiate with your creditors to reduce your debts, sometimes by as much as half of your principal balances, and since it takes 2 to 3 years to complete, you may possibly find yourself debt free pretty fast using this option. The drawback to this option is that it may damage your credit rating while you are under this program as you are required to stop payment to your credit card and pay into the account opened with the negotiators.
You are encouraged to take the time to familiarize yourself with all debt relief options before coming to a decision.

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