Eliminate Credit Card Debt

Learn How To Eliminate Credit Card Debt And Be Debt Free

What is unsecured debt?

There are different forms of debt. 'Secured debt,' such as a mortgage, grants the creditor the right to secure the debtor's property to satisfy his or her obligations, in case of default. 'Unsecured debt' is debt that is independent of property (say-credit card debt). In the case of unsecured debt, the only remedy the creditor has in case of default is to sue the debtor and obtain a judgment. If what you have is unsecured debt, bill consolidation can help you get your bills under control. Alternately, for your unsecured debt, a bill workout can help you eliminate your debt. Both have disadvantages. If you choose to go with bill consolidation, you may find that, between the interest on the loan or the 'points' you pay, the cost of consolidation loans adds up. If you choose to go with a bill workout, you'll find it wise to retain a professional's services.

Bill consolidation and bill workout-aren't they the same?

No, they're not. Bill consolidation means that you reorganize your debt with the intention of paying your creditors in full. You can do it with a credit counselor's assistance, or you may take a bill consolidation loan. A debt workout, however, is a negotiated settlement of your credit card debt. By means of this settlement, you and your creditors come to an agreement that you'll pay a percentage of the debt. As just an example, you may come to an agreement with your credit card company to which you owe $10,000, that you'll pay only $4,000.

Can I do this myself, or do I need a professional?

Debt reduction professionals, including bankruptcy attorneys as well as debt management firms, are knowledgeable to initiate a settlement on your behalf-or you can do it yourself, but only if you know how to negotiate a debt settlement, and what a proper debt settlement should be. When negotiating with credit card companies, the point is that creditors have standard operating procedures to be followed.