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Credit Card Debt Forgiveness: Does it Exist?

American consumers owe about $1 trillion in credit card debt - that’s the highest it’s ever been. And for those who have a share in that total, repaying those debts can be challenging - especially considering the average pay raise is barely keeping pace with the nation’s increasing cost of living. Finding the extra cash that’s needed to pay back credit card bills can be tough, and at times it can seem overwhelming. For many, the idea of erasing credit card debt or finding quick credit card relief and “resetting” their debt load can be tempting. And while there are ways to achieve a zero balance on your cards, it is not a quick fix solution.

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Credit Card Debt Forgiveness: How It Works

So what is debt forgiveness - and how does debt forgiveness work? First, let’s get rid of the common misconception that credit card debt forgiveness is some sort of simple program that just lets you wipe out your debts - poof! It’s not that simple; and in fact, the term “credit card forgiveness” is a misnomer. The only ways to really get rid of credit card debt without paying the entire balances due are to declare bankruptcy or to negotiate with a creditor to reduce your balance.

Credit Card Debt Forgiveness Option 1: Bankruptcy

There are two types of bankruptcy for consumers. One (Chapter 7) allows you to completely erase your unsecured debts like credit cards, while the other (Chapter 13) forces you to establish a payment plan so you can pay your debts back over time. If you’re looking for credit card debt forgiveness - that is, wiping out your balances entirely - Chapter 7 is the way to go. But it’s much more difficult to qualify for a Chapter 7 bankruptcy, and you may be forced to give up other assets like your car. Both types of bankruptcy take a huge toll on your credit score; in fact, a bankruptcy will stay on your credit report for years - usually seven years - and during that time, your credit score will be very low. Once the bankruptcy is off your credit report, it can still take years to rebuild your credit so you can qualify for a mortgage or car loan. Bankruptcy can also affect your ability to get insurance and to qualify for some types of employment. Plus, there’s the psychological component of knowing you didn’t meet your financial obligations. The bottom line: bankruptcy comes at a very steep price. The good news is that bankruptcy is a last resort for a reason: you have other options to get out of debt, including a Debt Settlement Program.

Credit Card Debt Forgiveness Option 2: Debt Settlement

In cases where you’ve fallen far behind your payments, a credit card company may be willing to accept a reduced balance that will be regarded as payment in full. A debt settlement plan will typically mean paying back around 50% of your total debt balance to the creditor over a 3-5 year period. Debt settlement, also known as debt negotiation, can be handled by the debtor or by a debt settlement company. As with any form of debt relief, there are some risks associated with debt settlement. One risk is that the credit card company does not have to agree to your negotiation. Moreover, even if you do get the creditor to agree to a reduced balance, missing payments specified by the agreement could cause you to lose the settlement and be responsible for the entire balance. Debt settlement also impacts your credit, but timely payments and good financial habits can reduce this impact and get you back on track. Any major financial decision should be carefully evaluated based on your unique situation to determine the best course of action before seeking credit card debt forgiveness through any means.

Debt Settlement With The Financial Support You Need

When you don’t think you’ll be able to pay off your credit card debt in full, and you want to avoid the steep price of Bankruptcy, a viable solution is a debt settlement plan. A debt settlement plan makes it possible to work your way out of debt in approximately three to five years with the help of an experienced debt settlement company. The providers of CareOne Debt Relief Services have built relationships with over 207,000 Creditors. These relationships have provided us with valuable historical data on what those creditors usually accept during negotiations, thus helping us create plans for our clients that lead to the best possible outcomes. Although there are still risks associated with debt settlement, working with a debt settlement company can help minimize these risks, and has helped many get out of debt without having to file for bankruptcy. Our expert team is ready to help you develop a debt settlement plan that works with your budget and your lifestyle, so you can pay back debts faster and with less stress than you probably imagine. Your plan also comes with comprehensive debt counseling to arm you with the tools to help you stay out of debt. Take the next step toward your debt-free future and call CareOne at 866-497-1639 to get started with a free debt analysis today.

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