Category Archives: credit card debt
One very effective way of reducing your overwhelming credit card debts is to transfer the existing credit card balance to a different company that offers a lower interest rate than the existing one. Credit card companies make their whole lot of money by charging the interests that you pay and it can usually go up to 25% or more. As an introductory offer, many credit card companies offer 0% interest rate for a limited period ranging from 3 months to 1 year. If you don’t let the interest to grow higher and go out of control, then you can pay off your credit card balance within a short period of time. If you cannot pay it off during the introductory period, then you can try the following tips.
- Stop over spending: it is very important to develop self-discipline within yourself. You can keep a check on your credit card debts when you become frugal and not spend unnecessarily. People who cannot stop themselves from using their cards can cut it totally or keep it in a safe place away from their reach. Use only that money that you need instead of borrowing more which can become a bigger problem. Try to use debit cards which can be a solution to many problems.
- Negotiate for a lower interest rate with your credit card company: if you are paying your credit cards at a very high interest rate, then you can call your credit card company and negotiate for a lower interest rate. If they don’t budge, then you can switch to another credit card company. It’s worth trying this shot.
- Paying more than the minimums: it is always suggested to pay more than the minimums every month. You will not only save a lot of money in interests but pay more towards the principal and reduce your debts. On the other hand, the credit card companies want you to pay only the minimums, because that’s how they make their money and do their business. Don’t let your hard earned money eaten away just in interests charged by the credit card companies.
- Creating a budget: It is very important to create a budget so that you know how much money you need to spend for basic living expenses. Once you have taken care of all the necessary expenses, then you can allocate the remaining funds towards paying your credit card debts every month. If you are following your budget every month, then it will be easier to know how soon you can lead a debt free life.
- Seeking professional help of a credit counseling company: If you are finding it hard to manage your credit card debts, then you can talk to a credit counseling company for help. There are different debt management programs ranging from 2 years to 5 years that can help you get rid of your debts. They will go through your financial situation, set a budget, and negotiate with your creditors for lower repayment arrangements. In most cases, they will talk with your creditors and get the interests and fees waived off, thereby reducing the total amount you owe. They can also stop all the collections calls from your creditors, reduce your monthly payments, combine everything into one single monthly payment and help you in avoiding bankruptcy. This will be your first step towards a debt free life.
Do you know what a credit card debt lawsuit is? When a consumer defaults in making payments on his credit cards, the creditor will use all possible ways to recover the debt from the debtor. They will go to the extent of taking him to the court and get a debt judgment against him. Many people do not realize the importance of a lawsuit and hence they miss the chance to defend themselves.
Why will a consumer default in making payments on his credit card debts? There can be a variety of reasons for it. It may be due to unemployment, health problems, sudden death in the family or may be due to other reasons. If the judge understands that the consumer is going through real financial hardship, they might rule in his favor and hence forbid the creditor from collecting the full amount from the consumer.
If you are on the risk of being sued, it is important that you consult a lawyer who deal with judgment cases. Basically, when you receive the court summons, you have 20 days to file your answer to the court clerk. The summons will have the court date and time and its important that you show up on the hearing date. If you do not show up, there are more chances that the creditor will try to get a default judgment against you. It is a good idea to explain your situation to the judge with all necessary proof, and have the case turned in your favor.
A debt judgment is the creditors legal rights to garnish your wages, or put a levy on your bank account or personal property, until the debt is paid off. There are four states in which a creditor cannot garnish your wages. They are Texas, North Carolina, South Carolina and Pennsylvania. All states have their own set of laws regarding garnishment. In California, whatever your income is, up to 25% of your disposable income can only be garnished.
There are other states like New Hampshire in which wage garnishment is not the preferred method of judgment. They will either try to put a levy on your bank account or on your personal property. In most of the states, the creditor has the right to garnish between 10% to 25% of your disposable income as per the laws of the individual state.
If a consumer is receiving threats of judgment from several creditors, only one garnishment is allowed at a time on a first come, first served basis, who is able to contact the employer first.
There are certain exemptions to garnishment, like social security, pension payments, wages of the elderly and disabled cannot be garnished as per the laws.
- Helpful Resources:
if you are being sued for your old credit card debts, there’s nothing to panic. Although it can be very frightening experience, but there is a solution to it.
It is important to make rational decision. Often times, when people get served, they try to call the creditor or the attorney and try to work out some kind of payment arrangements to avoid the lawsuit. Unfortunately, not all the creditors are willing to work out a deal when it has gotten to that point.
That being said.. it opens the opportunity to negotiate with the creditor and try to settle the debt by at least 60% or more. Here’s the scoop. The creditor has already filed a lawsuit against you. There is no way now you can trust the creditor or the lawyer. They will try to collect all the points that you discussed with them to make their case stronger.
Most of the times, the creditors or the collection agencies will issue fake legal papers threatening legal actions against you. They will also find you as a good prospect for a “default judgment”.
A default judgment takes place when the debtor does not respond to the summons sent by their creditor. Usually a summons has 20 to 30 days to respond. Many a times, the debtors do not respond to the summons and thats how they get a default judgment against them. This is a golden opportunity for the creditor because they will add inflated fee plus interests, attorney’s fees, etc. And they will even garnish your wages or freeze your bank account until the judgment is satisfied in full.
It is important that you respond to the summons within the appropriate time frame with an “Answer”. You can feel a little secure and your assets are momentarily safe. Some cases move faster than others. But on an average the length of the time from the summons to the conclusion is almost seven months. Once you send them your Answer along with filing it at the court, the creditor is put on notice while the time you present your case.
You need to present a strong case to drop the lawsuit altogether. If your debt is more recent, you can use other tricks and still if they do not drop the case, it will move on to the discovery period. They will send you a document with lots of questions about the debt and you have to respond to it.
If you are not clear with some of the questions, then you can also send questions to your creditors during this discovery period. The creditors or the collection agencies have to respond to your questions to make their case strong and valid.
Do your research and you will not only save your money but also your credit rating. It is very important that you file your answers on time and pay close attention to every step of the process.
A Recent research suggests that an average American family uses at least 6 credit cards at the same time. Due to global economy crisis there are many people who are going through a hard time paying their outstanding amount and not able to find any other way.
In 2009 there was a special program announced by the government to help this kind of people where they were offered an economic stimulus package to minimize the citizen’s financial burden. Their were new rules implemented on credit card by the government so that the debtors could pay their debt in an easier manner. The government took the entire necessary step to provide debt relief to the debtors.
Obama’s Credit Card Debt Forgiveness Act 2010 has been the topic to talk about among the people. Anybody who is drowning in debt wants to eliminate their debt by applying this act. In reality there is no such advantage, in fact many people are mistaken to understand this act. They are totally trapped by the terms that are used in this act. Debt cannot be completely waved off. By just using our common sense we would realize that it is next to impossible for the government to erase all the outstanding debt which is used by us. The fund cannot be used by the government in this manner.
On the other hand had you been the creditor do you think you had accepted this deal? I think absolutely no, and it would be very unfair on the creditor’s behalf to wipe out the entire outstanding amount without getting a single penny. It would be 100% scam if any of the debt relief companies are using this act to be there unique selling point.
What ever the amount may be whether more or less the creditors make sure that the debtors pays it back. Negotiation with the creditors is the only way for the debtors to reduce their debts or say make themselves debt free, in case the amount is very small for instance hundred dollars the debtors can write a letter of request in order to settle their debts.
The debtors usually make a conversation with the creditors to negotiate their debt if the debt is big so that their total amount is reduced by approximately 50%. However in the most pathetic situation the debtors finally declare bankruptcy in case they are not able to pay back any single penny.
To sum up, there is no short cut for you to “delete” your credit card debt immediately.
This link will give you better idea: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre02.shtm
Credit card debt is a common problem facing by the customers today. As people find it easy to carry a card instead of money, they have the habit to use their credit card for a small investment also. Sometimes there expenses are more than their credit amount and this result to huge balance. As the balances increases the debt too increases and hence people easily fall in credit card debt. By adopting some careful steps, it helps a customer to reduce credit card debt.
The first step which should be considered to reduce credit card debt is to stop using credit card. As long as you used it, credit balance increases and more easily you are fallen in debt. The more the debt is, the more money you have to pay. If you need a credit card, it is secure to keep only one rather than many, so just cut off all your other credit cards. You could have one credit card which could use in case of emergency. While going with a single credit card and avoiding debt, you can consult your credit card companies for the lower interest rates. Owe the credit card with lower rate of interest. Go for the special offers.
Following are few steps to help you to reduce credit card debt:
1) Avoid using credit card for every payment. If you are purchasing then pay them off by giving money, instead of using credit card. If you cannot avoid it, then better don’t purchase the item.
2) Just prepare a list of all the credit cards you are having. Start from the credit card with minimum balance to high balance.
3) Do the payment regularly so this would reduce your balance. Don’t reduce your payment amount once your balance starts reducing.
4) If you have got any other income instead of spending it anywhere else, better put it completely on your credit card balance. This would reduce credit card debt considerably.
5) You can also negotiate with your credit card company. If are having hard financial times then consult with your company to reduce your interest rate. You could give them the amount which you can easily manage.
6) One way to have a good credit sore also prevents you from credit card debt. Go to find a credit card with zero percent introductory rates. This credit card can be used to pay off all your credit card debt. Once you come out of your debt then do the payment for your card. After a certain period when your introductory interest rate is over, then search for the other credit card with zero introductory rates. In this way one with a little debt over his head could easily reduce credit card debt and have a good credit score.
7) The other step to reduce credit card debt is debt consolidation. Some of the companies offer you to consolidate your debt in case you are unable to pay off your debt. These companies offer you with an affordable interest rate and you could cut up your debt by large margin.