When you have several debts, student loan debt, car loans, and credit cards, and you think that the minimum payments you pay every month are no longer enough, you might consider getting debt consolidation.
One thing you might need to know is that it is a loan that has extended repayment terms, which mean that you will have to pay for your debt for a longer period of time.
This time, let’s talk about credit card debt relief.
You might think that it means that all of your credit card debt is erased and you can live free from the stress of having to pay the minimum payments monthly.
But that is not true.
Credit Card Debt Forgiveness
If you have a certain amount of credit card balance and you have not paid for it for months, most likely, a collection agency has already gotten your debt.
Instead of your credit card company, you will need to negotiate with the collection agency.
For example, if you have $14,000 in debt and you are able to settle so you only need to pay $10,000 which you can pay right away or in installments.
It means that you are able to get $4,000 as a forgiven debt.
The problem is you still have to pay for the taxes.
Limit the Damage to Your Credit Score
In an ideal situation, it is better if you tell your credit card company when you are about to miss a payment.
You can explain about your problem to the hardship department. At this point, you cannot ask for the credit card debt relief though.
Probably, you will be offered to pay for your debt without interest for a year. But most likely, your debt will not get reduced.
One of the benefits of doing this is that you can limit the damage to your credit score.
You Always Have Options
When you cannot pay for your credit card, you might think that the only options you have are either debt settlement or bankruptcy.
Actually, you can ask for forbearance when you cannot pay your credit card. Because you just lose your job, for example.
When you get forbearance, you can either make the smaller minimum payment for your credit card debt or you do not need to pay it at all for a certain period of time.
Unfortunately, you will still need to pay for the interest. If you think you need help, then you can look for a nonprofit organization that offers you credit counseling.
You can also ask them about credit card debt relief.