How Credit Card Debt Elimination Will Prevent You From Filing For Bankruptcy

Credit Card Debt Elimination

credit card debt eliminationBeing in debt and mismanaging finances can place a person or even an entire household in a difficult position. In order to free oneself from debt, a lot of individuals consider filing bankruptcy. The recent revisions in bankruptcy laws have changed the situation. With these new laws, it is not as easy for people to be debt-free via bankruptcy. Still, there are still some people and circumstances to which bankruptcy is applicable. However, the effect that bankruptcy brings can last for years. When thinking about filing for bankruptcy, one should first find other options to eliminate debt. Here are three credit card debt elimination strategies which may help.

Credit Card Debt Elimination = No More Credit Card Usage!

Those who do not file bankruptcy have different decisions to make. For example, one person who has amassed 20,000 of debt is in a different position to someone who has 5,000 of debt. The one who has a smaller amount of debt may be able to pay the balance owed without even filing bankruptcy. The person who has $20,000 amount of debt doesn’t have to file bankruptcy, but they would have to make a huge personal sacrifice to eliminate their debt.

If  you are in really serious about credit card debt elimination, credit card usage should be limited. Actually, if one can help it, stop using credit cards at all. Another tip is to pay more than the monthly minimum. Do you know that monthly minimum payments hardly cover additional finance fees? In order to be able to reduce balance significantly, pay the required minimum amount monthly and add $50 or $100 more.

A successful credit card debt elimination plan is rooted in one’s discipline and sacrifice in just using cash to pay for living expenses and necessities.

Credit Card Debt Elimination Options


Request Lower  Interest Rates

If negotiation with the creditor is possible, grab the opportunity to seek lower interest rate. Usually, this can be asked if one has been a good payer to the credit card company.

When asking for a reduction of interest rate, it is best to put the best foot forward. Having a good history of credit and repayment may be able to convince the creditor to reduce interest rates.

Credit score also plays a role when a creditor considers interest rate reduction. A low credit score might need the assistance of debt consolidation agency.

Once your interest rate is lessened, is it much easier to reduce the outstanding balance. This is because your financial fees will be significantly lessened.

Refinancing or Home Equity Loan

Homeowners have an advantage when trying to eliminate debt. Why? Because values of homes increase through time, therefore owners gain equity on their property. When one is a homeowner, it is possible to tap into the property’s equity. Refinancing a home or getting home equity loan will enable the owner to have a considerable amount of money which can be utilized for debt consolidation.

These are just a few debt elimination strategies which can be included in your credit card debt elimination plan. Remember, managing finances properly can lead to a debt-free comfortable life. So click on the link below to see how credit card debt elimination can help get out of debt.

How to Eliminate Debt Without the Need to Consolidate Debt

Here’s a very informative debt elimination article I found on Ehow.com that talks about eliminating credit card debt without the need to consolidate your debts.  The article basically shows you how to get out of debt the old fashion way.

Thinking you might want to consolidate debt loans?  Need to put away your credit cards? There are good alternatives to debt consolidation. Unfortunately, just like W.C. Fields’ common sense cure for insomnia–get lots of sleep–many people offer equally simplistic advice about getting out of debt: just pay off your bills or consolidate debt loans (which only rearranges your debt and does nothing to pay it off.) It’s not that simple.

Getting into debt is easy. Getting out can be a struggle. We get into debt innocently enough. For some of us, we do so by design–to buy a new house or car or fund a coll ege education. For others, it is by accident–the transmission in the car fell out, the roof on the house fell in, or one of the household’s income earners was pink slipped. Then, of course, still others get into debt by mismanagement of finances–because they live beyond their means or just can’t resist taking advantage of every cent of available credit.

Here is a step by step way to get out of debt.

Step:1

Stop accepting a minimum level of debt in your life. Many people have a comfort zone of acceptable debt. When the amount rises above some arbitrary figure, we cut back temporarily, only to resume normal spending later. That’s why some people carry thousands of dollars of credit card debt for years–paying a small fortune in interest each year–because it never occurs to them to pay it off, put away the plastic and start using cash.

Step:2

Pinpoint your position. Excluding mortgage, determine how much you owe between cars, credit cards and other debt. At the same time, calculate how much discretionary income you have to begin whittling away at your debt load.

Step:3

Map out your debt-elimination strategy complete with a Zero Debt Day to celebrate your freedom from debt. Base your plan on three factors: time, discretionary dollars and total debt.  For instance, if you owe $2,000 and can allocate $100 a month exclusively to debt reduction, you’ll be debt free in around two years, depending on interest.

Step:4

Stop adding new debt. Too often, we pay off one bill, then pick up new debt in the process.

Step:5

Adopt a cash-only policy, and put the credit cards away.  If money is tight, put off that new car for another year and put what would have been your monthly car payment to reduce your debts.

Step:6

Don’t be too easy on yourself. Be willing to do what it takes to get out of debt ASAP. Consider this: If you allocate $500 a month to debt reduction, when you’re finally free and clear you’ll have $6,000 additional cash a year for lifestyle enhancement or to send ahead for retirement.

Step:7

At the same time, avoid bread-and-water austerity. If you make yourself miserable, your plan will fail. Consider splitting discretionary cash in half–part for debt elimination; part for living (and playing) expenses.