Posted by: nbaground on: January 25, 2010
Are you thinking about settling credit card debt yourself ? With the current economic conditions bankrupting states it's comprehensible that the average member of the public is worried about their debts. If you have money outstanding on your credit cards you're most likely searching for ways to clear them and fast. There are a lot of articles giving advice on how to deal with debts but some of them will provide you with information that can land you in serious trouble.
Some would tell you to stop paying your very own debts for a period of time and then offer a small amount of money as a final settlement payment. The advice will probably not work since credit card firms are getting fed up with this tactic but if it did, instead of leading to a celebration it could lead you to a tax bill.
Instead follow these tips and get out of debt the right way!
Do not stop paying your debt collectors
If you're struggling to take care of the minimum payments telephone or write to your credit card providers immediately and ask them to reduce the payments. If you have great credit and a great reason for having monetary difficulties just like a wage cut, loss of hours, annulment, separation etc, they are likely to help you. When you stop payments they will immediately start being tougher on your account and you're going to get nowhere attempting to negotiate with them.
Put together a financial budget
OK it is not the answer you were looking for but you cannot hope to get out of debt if you are not sure of your present situation. You must know what you spend your cash on and the only real way to know this is to write it down. You need to list all the money you have coming in from your jobs, your benefits, interest on savings et cetera. You additionally have to list all of your expenditure preferably split into essentials (mortgage, taxes and food) and in-essentials (newspapers, lipstick and nights out!)
Work out what you can afford to pay
Hopefully you will have found some more money by working through your present incoming money and your very own spending habits. Then you have a chance of negotiating with creditors . If you have any stuff to sell on auction sites this is the time to do it. Generating a lump sum is a great way to pay off some credit card debts. Have you any abilities you could use to produce additional cash? If you can type you could get paid for writing articles. If you are great with animals offer to dog sit? Could you work additional hours at work?
Do not despair. There are ways of settling credit card debt without landing you in jail or facing a tax bill on what the tax man considers extra income.
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