If you’re carrying $15,000 in credit card debt you are about average. That”s because U.S. credit card holders have an average o $15,900 in credit card debt. Of course, this means that many of them are carrying even more debt like $20, 000 – $30,000 – $50,000 – $100,000 or even more.
How much credit card debt is too much?
If you’re family has a combined annual income of $100,000 or more then maybe $15,000 in credit card debt isn’t too much. But if you’re income is $60,000 or less you could be in a world of trouble. You could be getting intimidating phone calls from your credit card companies or debt collectors – at home or even at work. Getting phone calls at work isn’t just annoying it, it can be very embarrassing.
The bad way to deal with credit card debt
If you’re heavily in credit card debt and looking for a way to get out from under it, you could file for a chapter 7 or 13 bankruptcy. A chapter 7 would discharge all of your unsecured credit card debt. It would stop those credit card companies or debt collectors from harassing you at home or at work and give you a sort of fresh start. However, filing for a chapter 7 does have some very bad consequences. You may be able to keep your house – but only up to $60,000 in equity – your automobile, personal possessions and any tools you need to perform your job. However, you will lose your credit cards, any non-essential possessions (boat, trailer, etc.), and will have to undergo credit counseling.
But that’s not the worst
However, there’s an ever worse consequence if you file for a chapter 7 bankruptcy. It will stay on your credit record for 10 years. That’s 10 years during which you may not be able to get a new mortgage or new credit of any kind without a high cost attached. You might not even be able to rent a house or apartment without a large down payment or security deposit.
The best ways to handle credit card debt
There are two better ways to handle credit card debt than filing for bankruptcy.The first is to find a consumer credit counseling agency and let it help you develop a debt management plan. In this case, you will be assigned a counselor who will help you develop a payment plan. He or she will negotiate with your creditors to get them to accept the plan and to get your interest rates reduced. Once all your creditors have signed off on the plan, you will begin sending just a check each month to the credit counseling agency, which will then pay your creditors. If you stick with your debt management plan, you will probably get debt-free in about five years. However, it’s important to understand that a debt management plan through a credit counseling agency will do nothing to reduce your debt. You will owe the same amount of money plus interest.
Many people have found that the best way of all to handle credit card debt is with a debt settlement plan. This is where debt professional negotiate with your creditors to get your debts reduced – usually for a fraction of what you owe- and your interest rates as well. You will make one monthly payment that you can afford, which will be held in an escrow account (that you control) until a settlement is reached with all your creditors. We work to match you with a reputable debt settlement company that will negotiate good settlements that you don’t pay them a cent until all your debts have been settled. You can also cancel at any time if you are unsatisfied with their programs and you’ll pay no fees or penalties.
If you are looking for a good way to handle your debts, give us a call, chat with us, or fill out the form and get your free debt analysis.