What Debt Elimination Programs are Available?

Clear Excessive Credit Card Debt

Aug 2, 2009 Asa Ghaffar

Are you struggling with excessive credit card debt? Discover the best debt elimination programs to balance household bills. Enjoy a new debt-free life today.

Excessive credit card debt affects the quality of life of millions of Americans. According to Javelin Strategy & Research, 28% of those surveyed said that they were finding it more difficult to pay-off their outstanding card balance. A debt elimination program can help to provide a new debt-free life.

What Debt Elimination Programs are Available?

There are several excellent debt solutions available. These include debt settlement programs, Debt Management Plans, chapter 7 bankruptcy and chapter 13 bankruptcy. Whilst a debt elimination program enables a consumer to become debt-free in a fraction of the time, it will have negative ramifications for personal FICO scores. However, those who have already made missed or made late payment will already have a lower credit score so may have little to lose and a lot to gain.

Debt Settlement Programs

This debt solution allows a struggling consumer to clear excessive credit card debt over a period of 12 to 36 months. Providers argue that this particular debt elimination program can write-off up to 50% of the amount owed through a negotiation process with creditors. It does involve offering creditors a monthly payment so a debtor will need some disposable income available to contribute towards the agreement.

Debt Management Plans

A very different debt solution to a debt settlement program, excessive credit card debt is managed rather than written-off. A Debt Management Plan (DMP) is a gradual debt elimination program based around making monthly payments more affordable. Whilst it can take longer to clear debt, it does help in terms of affordability and preventing further contact from collection agencies.

Chapter 7 Bankruptcy

Filing for bankruptcy under chapter 7 is a debt elimination program that doesn't require a monthly payment to be made. It allows a struggling consumer to write off excessive credit card debt fully in just 4 to 6 months. Provided that income is below the state median and the debtor doesn't have non-exempt assets (stocks and shares, luxury car etc), eligibility should not be an issue.

Chapter 13 Bankruptcy

Those who don't qualify under chapter 7 bankruptcy may qualify under chapter 13. This potentially allows someone to restructure their debts and keep non-exempt assets in return for a monthly payment over a 3 or 5 year period. Excessive credit card debt will be written-off after this period elapses.

Choosing the right debt elimination program to clear excessive credit card debt is imperative. Always consult a qualified debt counselor before proceeding with any debt solution.

Sources

(July 2008). "Credit Card Issuer Profitability in a Difficult Economy". Javelin Strategy & Research.

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