How do I Get Rid of Massive Credit Card Debt?

Being massively in debt can be very daunting. For many reasons, people suddenly find themselves owing more on their credit cards than they can possibly repay. You don't have to worry about losing your home just because you've missed a few card payments, because credit card debt, unlike other forms of debt, is unsecured. But the debt will hang over you unless you do something about it. Wiping out a large amount of debt has long-term consequences, but it can also give you, more-or-less, a clean slate.

Instructions

1

Calculate how much you owe to credit card companies. Include interest and late-payment penalties.

2

Stop making monthly payments. This has a huge negative impact on your credit score.

3

Put the money you would have used to make the repayments in a high-interest savings account. The account should be one that lets you withdraw the money at any time without a penalty.

4

Wait for your credit score to drop below 500. You can get your credit score from the three main credit bureaus: Experian, TransUnion and Equifax.

5

Calculate how much money you've saved up in your savings account.

6

Contact the credit card companies and explain that you cannot repay everything you owe. You will need to provide evidence of this, such as payslips and account statements.

7

Offer to make a partial payment equal to the amount you've saved up, in exchange for the remainder of the debt being erased.

8

Wait for the credit card companies to reply. They will either agree, refuse or make a counteroffer. More often than not, they will agree because a partial payment is better than none at all. They know that a person with an extremely low credit score is unlikely to repay their debt. They would rather have some of their money back than have you default on the full amount.