subject: Credit Card Debt Relief - Legal Options to Negotiate and Settle Credit Card Bills [print this page] There are many ways to settle or negotiate your credit card bills and there are many forms of settlements. The big question is are they legal and binding and what are your legal options. There are many acceptable options ranging from Credit Counseling to Debt Negotiation. But legal you ask. Well there is just one way that I know of, that is unless there is something illegal about your Credit Card Company or bank. You have one legal option and that is filing Bankruptcy.
Bankruptcy
A few options are available for eliminating credit card debt, with personal bankruptcy. Chapter 7 bankruptcy allows you to discharge, or eliminate, all of your credit card and other unsecured debt in just a short time. Chapter 13 bankruptcy has a five-year payment plan based on your income and expenses. Once the five years is up, any remaining unsecured debt will be eliminated. Bankruptcy is effective at eliminating debt, but other options are less damaging to your credit.
If you have a minimum of assets, credit card debt, automobile loans and a mortgage, Chapter 7 is an easy way to go. Remember it will ruin your credit for a while, but you can discharge most of your debt and start over clean and fresh. The Courts have made filing very easy, it's all electronic, and the bankruptcy is filed with the courts and electronically sent to all of your creditors. In about 60-90 days you will have a hearing with a Court Appoint Bankruptcy representative. If all goes well your bankruptcy will be discharged and your attorney will take care of everything else. And you start fresh
Payment in Full
Now you can always pay in full. Sometimes if you are a good risk and still have some assets, you can consider a consolidation loan from your lender or a home equity loan (these are very hard to get today). You then just write a check and pay off your bills. This will reduce your monthly payment and reduce your interest. If you can get the loan it is the best route to go, it will save your credit rating.
Debt Negotiation or Settlement
Debt Negotiations and Debt Settlement are both legally binding ways to settle your debt, but you do not have a legal right to these. You need to contact your creditors and begin to negotiate with them. If you use a credit counseling agency or a debt management company, they will handle the negotiations. Your creditors do not have to accept any plans or arrangements. But once you have reached a negotiated settlement with them it is binding as long as you keep up your end of the bargain.
Remember, the credit card companies, the banks and the lenders all have legal recourse with a slew of attorneys all over the country filing suit. They have more legal remedies then you do and they will use them, so make sure whatever you do, you do find a way to work with them.
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement. Check out the following link to locate legitimate debt help in your state.
Credit Card Debt Relief - Legal Options to Negotiate and Settle Credit Card Bills
By: Channing Blaine
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