Posts Tagged ‘avoiding bankruptcy’

Avoid Bankruptcy By Paying Off Your Credit Card Debt

Credit card debt is one of the main reasons why so many consumers become bankrupt. However, it is important for you to keep in mind that there are several alternatives still available to avoid bankruptcy no matter how worse your debt and financial situation is. Following is a brief step-by-step guide on how to do this.

Assessment Of Your Financial Situation

When it comes to paying off your credit card debt, the first step is to do a thorough assessment of your current financial situation. Make sure you are using accurate details, whether it is about the outstanding debts, your regular and irregular income, or anything else. You have to be very specific while you are assessing liquid assets in terms of cash or anything that can easily be converted into cash. This step to avoid bankruptcy may also involve doing a garage sale, where you will be selling things from your home that you no longer use. The idea is to do everything possible to get as much cash as possible. This will make the negotiation process very easy for you.

Emotional Assessment

Once you are through with financial assessment, the next step is to do a thorough emotional assessment. You will have to be very honest while you do this. The objective is to find out if you have good negotiation skills. If not, you may consider getting help from a professional mediator. In order to negotiate a good alternative arrangement, you or the mediator must be strategically focused, resilient, optimistic, socially skilled, influential, and knowledgeable.

Choosing The Right Mediator

If you are considering hiring a mediator to help you with the settlement of credit card debt so that you can avoid bankruptcy, there are several things you must keep in mind. For example, besides possessing the above skills (as mentioned in step 2), he/she should also charge a very reasonable fee (it is better if you are lucky enough to find one who doesn’t charge a fee at all). There are various credit card settlement companies available in the market; make sure you choose one with a solid history of success.

Negotiating An Agreement

You or the mediator can now begin the negotiations by having a meeting with an authorized supervisor at the credit card company. You will have to give them a proposal that should include what kind of favors you want from them. Your proposal should also explain with certain facts and evidences that convince the lenders that you will not make further defaults if the new repayment plan is accepted. While you do such negotiations to avoid bankruptcy, it is important to note that the first proposal is not the final one; it only opens the door of negotiations. In most cases, the first proposal is never accepted. Therefore, a good idea is to offer your creditors a quarter (25%) of the full amount in your first proposal, but you must have a clear picture about the final settlement that you can afford. Skillful negotiations, either by yourself or with the help of a mediator, can help you achieve an agreement that requires you to make 50% of the outstanding payment within a certain period of time.

Get The Final Plan In Writing

Once a mutual agreement is reached, request the supervisor to provide you a written copy of the same that must be duly signed by both you and the authorized person from the credit card company. Always remember, verbal agreement does not have any legal value. A proposal becomes an agreement only when it is in writing.

Overall, these five steps should help you reach a favorable agreement with the creditors, allowing you to pay off your credit card debt on easier terms so that you can avoid bankruptcy.


Custom Search
Bankruptcy

Basic Things You Must Know About Bankruptcy Dismissal

When you file a petition for bankruptcy and the court rejects your petition on certain grounds, it is legally termed as bankruptcy dismissal. Dismissal means your case is officially closed and that the court will make no further rulings on your case. Some of the most common reasons why a petition is...

Bankruptcy
Credit Repair

Building Credit With No Credit

When it comes to building credit with no credit, there are several online canadian pharmacy factors that you need to take into account. Just because you do not have any credit history at present, it does not mean you will never have one. No one is born with a readymade credit history. You have to gi...

Credit Repair

A Loan To Defeat All Loans Debt Relief Loan
Payday loans fax-free payday loans and instant online payday loans are everywhere be it on the Internet newspapers or television. Today when the economy is in turmoil these loans look like the saving gra... Read more

Tips On How To Consolidate Payday Loan Debt
You may need to consolidate payday loan debt when you are caught in the middle of a financial crisis arising out of your inability to repay multiple loans. Debt consolidation loan allows you to consolidate all... Read more

Do Not Put Up With Debt Collectors Harassment
There was an emergency and the need arose to take a payday loan. It seemed to be the fastest and the best option available then. However now the debt collectors harassment is horrendous. The fact that using t... Read more

Consolidate Payday Advances To Save Yourself
Payday advances are loans taken against a persons paycheck. They have a way of digging into your paycheck month after month. They usually have exorbitant interest rates though the sites offering the services... Read more

Can I Consolidate Payday Loans
Can I consolidate payday loans is a question you are sure to ask yourself when faced with a trying financial situation. When payment of loans becomes difficult it is possible to consolidate and replace many... Read more

What are the pros and cons of debt consolidation?