Credit card debt can sneak up on you. You miss a payment or make a couple of late payments, and before you know it, your minimum monthly payments add up to several hundred dollars a month, and your creditors are threatening to sue you over credit card debt.
Credit card holders who are afraid they are going to get sued over their credit card debt have at least three alternatives available to them: they can declare bankruptcy, they can use a credit counseling service, or they can reduce their credit card debt by cutting back on expenses and applying the savings to their credit card balances.
Bankruptcy: The Right Choice for You?
Bankruptcy is a viable option if your debt has become so uncontrollable that you have no hope of paying it back. A bankruptcy lawyer can explain the details of the process to you and help you decide if it is the right choice for you based off of your circumstances. Filing for bankruptcy can give you some time to rearrange your debts and set up a good plan for paying off your debts. And it will definitely stop creditors from barraging you with threatening phone calls.
Bankruptcy is a drastic step that can have a negative impact on your credit rating for many years to come. You should not consider declaring bankruptcy until you have consulted a bankruptcy attorney and carefully weighed all your other options.
Is Credit Counseling For You?
If you are concerned that you may be sued over credit card debt, one alternative to bankruptcy is to consult a non-profit credit counseling service. A credit counseling service will assess your income and your debts and approach your creditors on your behalf to make alternative payment arrangements. You make one monthly payment to the credit counselor, and the credit counseling service pays your creditors for you, per the agreement they made for you.
Although using a credit counseling service can cause your credit report to show that you have made late payments, any negative repercussions that doing so does to your credit will not be nearly as serious as they would be if you had filed for bankruptcy.
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Is secured debt consolidation a good choice for getting your debt paid off? Learn more about what it is and whether or not it's a good choice at the Debt Smackdown website.
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