You may have heard the legend of Sisyphus who was punished by being made to roll a huge rock uphill every day, only to see it roll back down.
If you’re heavily in debt, you may feel like Sisyphus–that you just keep pushing that credit card debt up hill one day only to have it roll back down so you have to start struggling with it again the next day.
Some alternate solutions
There are credit card debt solutions available that could at least make your burden lighter.
Many families who have found themselves heavily in debt have gotten help through a local consumer credit counseling agency. If there is one in your area, you could sit down with one of its counselors. He or she will go over all your finances and help you develop a payment plan. Your counselor will negotiate with your creditors to get your interest rates reduced and to “sell” your payment plan. In most cases, you will then send the agency one check a month and it will pay your creditors based on the payment plan to which you all agreed.
Debt consolidation loan
A second of the credit card debt solutions is a debt consolidation loan. If you own your own house and have equity in it, you could take out a second mortgage or a refi (refinanced mortgage) and pay off your credit card debts. The major benefits of a debt consolidation loan is that you will have a lower monthly payment, you will need to write only one check a month instead of the six, eight or more you have to write now, and you’ll have more time to pay back the loan.
Debt settlement is another of the credit card debt solutions. This is a technique whereby you stop making payments on your credit cards and then contact the credit card companies and offer to settle your debts for fifty cents or sixty cents on the dollar. While it’s possible that you as an individual could do this, most people have found that it’s better to hire a debt settlement or debt relief company to negotiate for them. Debt counselors at a debt settlement or debt relief company have excellent relationships with the credit card companies so are usually able to negotiate much better settlements.
The “doomsday” of credit card debt solutions?
You could file for bankruptcy, which is the ultimate of the credit card debt solutions. You could choose, for example, a Chapter 7 bankruptcy, which would discharge all of your credit card debt. However, a bankruptcy will stay on your record for 7 to 10 years, during which time you may find it very difficult to get any form of credit. This makes bankruptcy sort of the doomsday answer to credit card debt.
For some consumers, bankruptcy is the best choice due to their unique circumstances. The debt consolidation programs we recommend are not for everyone either. You need to do your due diligence and evaluate all your unsecured credit card debt solutions before you make a decision.