How to Get out of $24,000 in Credit Card Debt

With the U.S. in a recession, many people have large amounts of personal debt. If you have $24,000 in credit card debt, you are hardly alone. In March 2010, total U.S. revolving debt was $852.6 billion. Ninety-eight percent of that was credit card debt. The average American household owes over $16,000 on credit cards. If you genuinely cannot repay such a large debt, you can get rid of a large portion of it. One way is to file for bankruptcy. However, if you are a homeowner or have any significant assets, this is often not the best solution, as you can end up losing your home and those assets. There is another way.

Instructions

1

Stop making payments on your credit cards. This will immediately start to lower your credit score. If you are struggling with unmanageable debt, your credit score is probably already very low.

2

Put the money you would have used for the repayments in a high-interest savings account.

3

Check your credit score regularly. You can find out the score from TransUnion, Experian and Equifax.

4

Wait until the score drops below 500. This is considered to be a very low score. No reputable lender would let you borrow money with this score.

5

Contact your credit card issuers and offer to make a partial repayment equal to the amount that you have saved, in exchange for the remaining debt to be erased. The credit card companies will run a credit check. Your low credit score will tell them that you will never be able to repay the full amount. They will either agree to your offer or make a counteroffer.

6

Rebuild your credit score over the next seven years by keeping up with monthly repayments and avoiding getting into more debt.