How to Wipeout Credit Card Debt Without Going Bankrupt

Faced with rising debt and uncertain economic conditions, some people consider bankruptcy as a way to alleviate their financial pain. However, bankruptcy can affect other aspects of life, including finding future credit or loans, and possibly finding a job. Whatever your financial situation, there are alternatives to bankruptcy that you can consider to help you wipe out credit card debt.

Instructions

Instructions

1

Determine the amount of your monthly income and expenses, including your credit card debt. If you have excess income, or find areas where you can trim expenses, pay that money towards your credit card debt. Use an online financial debt calculator to see how long it will take you to pay off the money you owe.

2

Call a financial counselor or a debt-reduction agency. Explain your financial situation and see what alternatives they suggest. Often, debt specialists will construct a five-year plan to pay off your current debt, with a monthly payment approximating 2% of your total amount owed. Under this system, you will no longer deal directly with your credit card companies, but pay one monthly payment that will be distributed to all of your creditors.

3

Talk to your credit card companies directly. Tell them your situation and that you would like to work out a payment plan. Especially in the current economic environment, many companies are willing to drastically reduce your payments and/or interest rates in order to prevent you from falling into bankruptcy and paying them nothing. In certain situations, your card company may even forgive a portion of your debt in exchange for an upfront payment.