Is Credit Card Debt Forgiveness Real?
Debt forgiveness is usually not as simple as it sounds. It occurs when a lender declares that a borrower no longer owes a certain amount, despite that the borrower has not repaid that amount. In other words, it is a case of a debt getter smaller on its own, just as late fees and compound interest are instances of a debt getting bigger on its own. If you see websites promising credit card debt forgiveness, you are right to think before you click. Very few things in life are free, and getting a credit card company to give you a discount on your credit card debt can have other consequences besides reducing your credit card debt balance. If you are hoping to settle your credit card debt for less than you currently owe, it helps if you first look at the big picture about your debts and your ability to repay them. A good place to start is to contact a Miami debt lawyer.
How Does Credit Card Debt Forgiveness Work?
Most of the time, credit card debt forgiveness does not involve the credit card company resetting your balance to zero and authorizing you to start charging purchases again, with the same credit limit you had before; the only way that could happen would be if a computer glitch out of your wildest dreams happened to strike the credit card company’s financial records. Instead, credit card companies are more likely to settle the debt for a lower amount than the current outstanding balance. Debt settlement companies often represent borrowers in this process, but their services are not free. Even if you choose to negotiate with the credit card companies on your own behalf, you should proceed with caution if you choose this route. The discounted amount could count against your credit score almost as much as a bankruptcy filing would, and unlike in most bankruptcy cases, you would still owe part of your credit card balance at the end. Sometimes credit card companies are only willing to settle your debt by selling the debt to a different lender; this is little better than when a lender sells your debt to a collection agency.
Alternatives to Credit Card Debt Forgiveness
If you know that your credit score will take a hit one way or another, but you are in over your head with debt, filing for bankruptcy is a better option than hiring a credit card debt settlement company. If you have a stable income, chapter 13 bankruptcy is a good option, but if your income and the value of your assets is so low that you are not at risk of the bankruptcy court liquidating your assets, you should choose chapter 7. If you still have hope of paying off your credit card debt, but you can’t afford the monthly payments, you should look for an affordable debt consolidation loan.
Work With a Debt Lawyer About Dealing With Credit Card Debt
A South Florida debt lawyer can help you make your credit card debt balance get smaller. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.
Source:
cbsnews.com/news/does-credit-card-debt-forgiveness-really-work-experts-weigh-in/
