Credit Card Debt Relief Programs
Credit Industry Law Changes

There are several effective credit card debt relief programs popular in the U.S. today. Much talk has circulated online recently about a debt relief program being introduced by the current administration which would make it possible for consumers with over $10,000 in unsecured consumer debt to have a portion of that debt cleared.

This is largely marketing hype used by credit settlement companies and others to attempt to sell at-risk consumers on some type of undesirable program. As yet, the government has not endorsed a direct consumer bailout of any sort. However, recent changes in the law have made it less risky to go through the real, legitimate processes that can help relieve your debts.

Types of Debt Relief

Here are some possible ways you might be able to relieve yourself from an overwhelming outstanding debt burden.

• Negotiate lower interest rates on loans and credit cards.
• Begin a debt consolidation program.
• Negotiate lower annual fees on credit cards.
• Negotiate a debt settlement agreement in your credit cards or outstanding loans.
• If all else fails, declare bankruptcy.

The method of debt relief that suits you best will depend on your total debts and the willingness of your creditors to negotiate some kind of debt relief agreement with you. You can attempt to go through these processes on your own or hire a professional credit counseling company to help you. Hiring help is the recommended option, since many creditors play hardball when dealing directly with a consumer. The process can be confusing and intimidating especially if you have little knowledge of the law.

Be on your toes, the credit debt relief industry is currently booming due to the state of the global economy, and many so-called credit card debt relief are thinly disguised scams designed to cash in on the misfortunes of others.

One of the major changes the current administration has made to the debt settlement industry is making it illegal for these companies to charge fees upfront. This was done with an eye to putting illegitimate companies and scammers out of business. Be very wary if you come across a debt settlement program asking for money upfront.

Negotiating to Reduce Interest Rates

For people with small credit card debts, negotiating with your credit card company to reduce your interest rate is probably the best one of the credit card debt relief programs available to you. When the debt is small it is not the principal which is the issue, but the high interest rates, which over time keep you from reducing and finally eliminating the debt completely.

Often late-payment fees and penalty interest rates are the reason consumers end up in difficult situations. If you can negotiate a substantial reduction on these costs, you will be on the right track to paying off your debts.

Negotiating a Debt Settlement

One of the major problems with credit card debt relief programs that use a debt settlement negotiation as part of the process is the difficulty in accomplishing it while keeping up with normal monthly payments. If you are still paying on time, the credit card company will see no reason to settle for a reduced balance. The way they see it, they will get their money eventually if they leave things as they are. In this instance a debt settlement might help you, but it doesn’t help them, so negotiating one may be very tricky.

Debt settlement will only work when it is mutually beneficial for both you and the creditor. That means it generally works best once you have fallen behind on payments or stopped making payments altogether. When this happens, you can make a case to the creditors that you simply cannot afford the debt and your only option is to declare bankruptcy, unless you and them can come to some mutually acceptable agreement. This is when they may become willing to negotiate. They know if you declare bankruptcy your debt may well get discharged by the court and leave them empty-handed.

The government has recently introduced tax breaks for credit card companies who settle debts, making a debt settlement with individual consumers more appealing to them.