Credit card debt has turned into a serious financial problem for literally huge numbers of people in the usa. Your credit may already be suffering and you may believe your only option is bankruptcy if you find yourself mired in credit card debt. There are debt solutions available that will actually help your credit score and will allow you to dig your way out of debt in a relatively short amount of time, however. So it is possible to get rid of credit card debt without hurting your credit score right? Keep reading for a couple moments... Rescue One Financial
Debt Relief Options
There are many debt relief available options for those who have credit card debt problems, some of them good and some of them not good. Options include debt settlement, debt consolidation and bankruptcy.
Debt settlement is really a negotiation process with your creditors in which they consent to a payment agreement that offers you relief from the debt to them. Debt relief agreements are frequently composed of a combination of elements, including reduction of accumulated fees, reduced or eliminated interest and reduced balance amounts. Payment of a debt settlement agreement can take the type of a single lump sum payment payment or several smaller payments. You simply pay a fraction of whatever you owe.
Debt consolidation does not eliminate your credit card debt, but it can make paying off your debts more manageable. These loans are often expensive and can actually make your financial problems worse, even though people are familiar with debt consolidation loans. In case you have bad credit it will probably be difficult to be entitled to a minimal rate consolidation loan that will provide you with a reduced monthly payment. You are able to consolidate debt using a second mortgage or home equity loan but again you will require good credit to qualify.
Bankruptcy is one of the solution of last resort for most people. If you have income and fail the Chapter 7 means test, bankruptcy laws have changed over the past several years and you will be required to pay at least a portion of your debts. Bankruptcy can harm your credit for as much as a decade, making it difficult so that you can buy a home or car and substantially improving the rates you spend for insurance. In some instances, a bankruptcy can stop you from acquiring a job or automatically disqualify you against professional licenses, dramatically impacting what you can do to back up your loved ones.
Affect on Credit Scores
Many people who are searching for financial answers to their personal credit card debt already are having troubles making payments. You may find yourself tearing the hair out on a monthly basis, attempting to keep a record of multiple credit card payments and trying to find the cash to pay only the minimum payment. This rules out making use of the traditional debt reduction methods like the debt avalanche or debt snowball.
If you are faced with unemployment or other unforeseen events that have decreased your income substantially in the past few years, you are not alone. Unfortunately, missed payments, late payments as well as a high debt-to-income ratio may have a devastating impact on your credit history. If you have missed payments and maxed out charge cards you have done most of the damage already to your credit rating.