If you have accumulated a significant amount of credit card debt, there are debt relief options available that can improve your financial situation. Some methods help you reduce your debt load and others help you eliminate it altogether.
Credit Counselors
A consumer credit counseling specialist is trained in debt counseling and reduction. He will help you put together a budget and provide strategies for eliminating your debt.
Credit Counseling Programs
Consumer credit counseling programs allow you to repay a lower percentage of your outstanding balances. The credit counselor contacts each creditor and works out a repayment plan.
Considerations
Before you can file a petition for bankruptcy, you must enter into an approved credit counseling program implemented by a government-approved organization six months prior to the petition filing, according to the Federal Trade Commission.
Chapter 7 Bankruptcy
If you decide to file a chapter 7 bankruptcy you will be able to get a fresh start once you receive a discharge. The bankruptcy trustee will sell all of your assets and forward the proceeds to your creditors.
Chapter 13 Bankruptcy
A chapter 13 bankruptcy allows you to repay your debt over a period of 36 to 60 months. You only repay pennies on the dollar. In many cases you get to keep your assets, such as your home and car. To participate in this is program you must have a reliable, consistent income.
Debt Relief Programs
There are many debt relief companies that will set up repayment plans and help you make settlement arrangements with your creditors. Many of these companies operate for a profit and charge excessive fees for their services.
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