Credit Debt Solutions

When you owe debt that you need to deal with, there are various credit debt solutions and approaches to take. One is to pay the full amount billed, in whatever monthly amounts are demanded. Another is to pay less and hope the creditor will accept it. Still another is to contact the creditor and ask for a reduction in the interest rate, the balance or a reduction of the debt in exchange for a lump sum immediate payment. Then there is the avoidance approach of simply not paying. Lastly, there is the legal recourse of filing bankruptcy to rid yourself of the debt.

More important than deciding on which credit debt solution to take is evaluating yourself and your life to discover the factors that led you into a high debt situation to begin with. For many years many nations have encouraged spending with abandon and the assumption of money advances and loans to spend even more money. This results in a spiraling and ultimately strangling debt monster that must be stared down and overcome. If you have ever gone shopping and brought things back home in the trunk of the car so your spouse will not see how much you bought, then you have a seriously out of control disregard for money. This kind of behavior will take you down the path to credit debt big time. So think about the way you shop, when you shop, and how much you spend. If one new jacket is not enough, but you have to have the same jacket in every one of the eight colors it comes in, then that is excessive and compulsive spending. I know, I have done it. Before you realize it, you will be burdened with a five figure debt. Check your closet. Are there fashions in there on the store hanger with the sale tag still attached after more than six months? Tag ! You have a credit debt problem. This first step, taking a good hard look at your buying and credit habits is essential to credit debt solutions. No one can correct a problem until they admit there is a problem.

Next step is crunching the numbers. Collect all the receipts, from all the accounts. Yes, I said all the accounts. Now get your calculator and add up the totals. Get the grand total of them all as well. Next, write the total of each credit account on the outside of the envelope of the latest statement. Stack them in order by amount, smallest to largest. Now start with the smallest account and commit to paying it off first. If you must, pay it in portions each month until it is completely paid, then go to the next larger total. This process will get you through paying off each of the accounts over time. Then celebrate with a dinner and champagne when you are debt free.

What if you are so far in debt that there is no credit debt solution, no way you will ever be able to pay them all off? What if the credit you owe is more than your annual income or two yearly incomes? That is the point at which you might want to consider filing bankruptcy or perhaps taking a home equity loan to pay them off. If you do not want to compromise your home, then bankruptcy is the solution. Normally, your home is not taken in a bankruptcy. Our government understands you need a place to live, so the home is protected from bankruptcy proceedings. As a last ditch effort prior to filing bankruptcy, give the creditors a call and ask them to reduce the balance and interest rate so that you can avoid bankruptcy. Sometimes creditors would rather get something than the nothing they will get in a full bankruptcy. If they say no, then go ahead and do what you must do.

Now, once you have rid yourself of credit debt, using one or more of these debt solutions, then commit to never allowing yourself to reach that extreme level of debt again. Keep just one card, and close the other accounts or just do not use them. Be aware that closing too many accounts in a short time span will actually hurt your credit rating. Monitor your debt level. Better still, pay each statement in full and you will avoid interest charges as well as credit debt.