Most people can open their wallets and pull out at least two or three credit cards or store charge cards; so, is it any wonder that there is so much credit card debt today?  If you are feeling overwhelmed by the amount of money you owe on your various cards, you are not alone.  Credit cards offer an easy way to pay for big ticket items, but it is often hard to stay on top of monthly payments when interest accrues so quickly. The following article will show you how to eliminate credit card debt without bankruptcy.

Claiming bankruptcy is an option that many consider when they are in dire financial straights but the consequences of filing under Chapter 7 of the U.S. Bankruptcy Code can be quite severe.  It will negatively affect your credit rating for up to 10 years, making it difficult to acquire other loans, rent property, or perhaps qualify for a promotion.  Thankfully, filing bankruptcy is not the only way to eliminate credit card debt.

Once you have realized that you are financially struggling because of credit card debt, you should follow these simple steps:

1.    Assess your financial situation – write down all your credit card numbers with the balance and interest on each, and prioritize them according to balance due or interest level if they are not all equal.  Then look at your financial situation as a whole, taking into account your income, expenses, and any other debts you may have.

2.    Contact your credit card companies – practice your negotiation skills by contacting representatives of your credit cards and presenting them with an alternate repayment plan.  Try to convince them to reduce the amount due by cutting down late payment fees or built-up interest.  It may be best to consolidate your debts and if this is possible, ask them to wave the balance transfer fee.

3.    Eliminate your debt – stop using your credit cards and work on reducing the debt by paying off more than the minimum balance to clear not only the principle amounts.  Getting a secondary part-time job may put a strain on family life, but will help eliminate your debt much faster.

Of course, this is not an easy process to follow and at times it will seem like a mammoth undertaking.  For those who feel that they are not able to accomplish it on their own, help is available in the following forms:

1.    Credit Counseling – after verifying that you are eligible, these agencies will approach your credit card companies and negotiate a more realistic payment plan on your behalf.  They will then consolidate your bills so that you pay them a monthly fee and leave the agency to distribute the money to the various creditors.

2.    Debt Negotiation – these agencies set up a trust account in your name that you pay into until you have a sufficient lump sum.  At which time the agency will negotiate with the credit card companies to reduce your interest and possibly the principle amount.

Some Consumer Credit Counseling Services (CCCS) and Consolidation Agencies are merely collection agencies for the credit card companies, and if you are unsure about which route to take, it may be best to consider federal debt management programs, such as:

1.    Government Credit Card Debt Consolidation Program – contact a registered agency who is able to assist you with receiving this grant.  It will require submitting an official application to prove that you are unable to pay your credit card debts, so you will need to provide all financial documents, including payslips, bank statements, tax returns, etc.

2.    Government Credit Card Debt Loans Program – meet with a debt counselor to discuss your case and have them combine all your debts into a more easily manageable single payment.

However you choose to eliminate your credit card debt without bankruptcy, avoid borrowing money from friends and family and prove to yourself that you can do it without their help, as it may end up getting you deeper into debt if not managed well.  At the end of this long and difficult struggle, make sure you don’t repeat the cycle and rack up any more debt.  A useful thing may be to close any credit card accounts that are still open, except for an emergency one.  However, be careful as this will lower your FICO credit score which is not advisable if you are planning on purchasing property in the near future.  It would be advisable to meet with a debt counselor to discuss your current and future options regarding your financial situation before making any serious decisions about how to eliminate your credit card debt.

If you still feel that filing a bankruptcy claim is right for you, perhaps you should take the time to fill out our free bankruptcy evaluation, which will place you in contact with a reputable bankruptcy attorney in your area.

Want to know the answer to the following question – Can I use credit cards while filing for bankruptcy? We have the information you’re looking for.