If you’re flat out crushed from overwhelming credit card debt, the situation’s only going to get worse. You do know that, right? The good news is you have options, including debt relief.
But can you qualify for credit card debt relief?
Well, let’s see.
What Is Debt Relief?
Debt relief programs offer a way out of stifling debt. They can help you make payments you can handle while lowering or eliminating the amount you owe. Whatever form you choose, the overarching goal is to return your peace of mind. After all, debt can cause chaos, anxiety, confusion, and more.
When You Should Seek Debt Relief
You should consider debt relief if there’s no chance of you paying off your unsecured debt – credit cards and the like – within five years, even if you darned near give up spending. You’re also a prime candidate if the amount you owe is half or more of your gross income.
Debt Relief Through Bankruptcy
We’ll start with the last resort first. You should only take this route if no other option is doable, since such a filing will reside on your credit report for seven to 10 years, depending on whether you go with Chapter 7 or Chapter 13.
- Chapter 7. It’s the most common type of filing and if you qualify, the process can be done in three to four months. The main requirement is a household income that’s lower than your monthly household expenses. Depending on your state, you may have to give up a second ride, vacation cribs, or family heirlooms. Oh, and your credit scores will get battered and stay on your report for a decade.
- Chapter 13. For this approach, you must be current on tax filings, be within debt amount limitations (this changes every three years) and be employed with sufficient income to handle monthly payments over the course of three to five years. You can keep your assets if you stick with the program. Notice of the filing will be on your credit report for seven years.
Debt Relief Through Debt Settlement
What is a credit card debt relief program? For many people, that means debt settlement. And for good reason: debt settlement is a popular means of getting rid of overwhelming debt. You hire a reputable company to go to your creditors and get them to accept less than what you owe to satisfy your accounts. They usually go along because they know that if you file bankruptcy, they get nada. Yes, your credit score will drop but it probably hasn’t been good for a while anyway. And besides, after you’re on a better financial path your score will rebound and then some. Most debt settlement firms require a minimum debt of $7,500.
Debt Relief Through Debt Management
With debt management, you can pay your unsecured debts – usually credit cards – in full, but sometimes at a lower rate or with fees waived. What happens is you make a single payment monthly to a credit counseling agency, which allocates it to your creditors. The rub is that you must close your credit card accounts and not open any new ones until you complete the plan. Bear in mind though, you’ll be kicked out of the plan if you miss payments. There’s no minimum debt requirement for a debt management program.
So, can you qualify for credit card debt relief? Sure, you can. Just make sure you select the financial strategy that’s right for you. Get going on that today