Credit card loans steadily go on increasing and finally become impossible to pay, because people tend to forget their repayment capacity while purchasing their desired products. Spending more than one earns is indeed a bad habit and can create a lot of financial difficulties for the person, if the mistake is not rectified in time. Now, let us understand the provisions to legally end credit card debt.
Measures for Eliminating Credit Card Debts
The first step to legally eliminate credit card debt is to have a strict control over your spending habits. Save money every month to pay off the credit card debts in installments. If you are using multiple credit cards and have a loan against each of them, start clearing the debts on the card which has lower interest rates as compared to those charged by the other cards. The process of credit card debt consolidation will combine your numerous loans into one single loan to make the clearing of debts easy. This process will help you improve your credit history, which will make it possible for you to secure a loan in the future after clearing the existing loans. We can request the bank or the financial institution who has issued the credit card to lower the interest rates to make it easy for us to repay the balance amount. Though the final decision in this regard will be of the bank or the concerned financial institution, and the chances of your plea being considered are minimal, it is always better to be positive. The best way is to pay off the loan amount at one go, if you have the money to legally eliminate credit card debt. Paying off the loan taken against the credit cards is possible without filing for bankruptcy.
Role of Counseling Institutions
It is not at all recommended by financial planners and analysts to take another loan to pay off the existing loans. One can consider the idea of taking some useful help from credit counseling institutions or companies. These institutions generally have a tie-up with the credit card facility providers and can help us lower the monthly payments by up to forty percent. They will be able to answer your basic question of how to legally eliminate credit card debt. While approaching the agencies to help you bring the situation under control, ensure that these agencies are not charging astronomical and exorbitant fees for rendering their services. The agencies with whom you are dealing in this regard should be non-profit making organizations and should have links with the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counselors. Remember to take help from these agencies in time to avoid the worsening of the situation.
Though it has been stated above that taking a loan to clear the existing loans is not a great idea, you can still use safe and secured loans in the form of home equity loans and home equity line of credit to pay-off your credit card dues. The Chapter 7 of bankruptcy is applicable when all your assets will be auctioned off to make you completely free from the loan amount. However, this will be used as the last resort, if all other ways to tackle the situation fail. As per the Chapter 13 bankruptcy, you will be given a repayment schedule considering your financial position, which will help you to legally eliminate credit card debt. You may be advised to stop using your credit card till you completely recover from the financial setback.
Being happy and satisfied with what one has is also important as excessive greed is responsible for making people take absurd and improper decisions. It is necessary for all people to understand the importance of saving and having discipline, when it comes to spending money.