Justifiably Eliminate Credit Card Bills
By: Stacy Fox
How can you legally get rid of debt?
The answer is complicated but if you know how to do it you can get out of debt forever.
The founding fathers wrote bankruptcy into the Constitution. When establishing the court system for the country, they specified only a supreme court and a set of bankruptcy courts. In fact, Thomas Jefferson declared bankruptcy twice.
Many famous people have declared bankruptcy as well. Walt Disney, Mark Twain and Lynn Redgrave have all declared bankruptcy.
Declaring bankruptcy is just one option for people with debt problems. Lets first discuss 2 less extreme options.
One option is to consolidate your debt. When you legally eliminate your debt through consolidation, you roll your obligations into one loan. Often you can arrange this loan at a lesser interest rate than you had when your debts were freestanding.
Instead of many payments you pay just one fixed bill.
If you have gone through a structured debt consolidation program, you will make this payment to your consolidator who will then make the payments to all of the individual creditors.
But sometimes youre in so far over your head that you cant make the minimums on your outstanding debt. Simply lowering the interest rate wont help. That is when you need to negotiate with your creditors for a reduction of the loan.
You can often pay only pennies on the dollar for obligations.
Why would creditors do this? Well, they know that if they dont work with you, youll choose the next option which is bankruptcy. You see, theyd rather get something than nothing.
But maybe bankruptcy is the premier option for you. Although it has negative consequences, particularly on your credit report and credit score, a Chapter 7 bankruptcy literally wipes away all of your debt. Its funny but, many people find their credit scores actually rise after bankruptcy because so much bad debt is eliminated.
Every year, about one percent of American households declare bankruptcy. But Professor Michelle White of the University of Michigan estimates that 17 percent of U.S. households are in a position where bankruptcy would benefit them.
You can legally eliminate debt. You may even be in a stronger position once you address your credit and financial problems head on.
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