Are you thinking about settling credit card debt yourself ? With the present financial conditions bankrupting countries it is comprehensible that the average member of the public is worried about their debts. When you have money outstanding in your credit cards you're probably looking for ways to clear them and fast. There are many articles giving advice on how to deal with debts but a few of them offer you information that could land you in serious trouble.
Some will tell you to stop paying your own debts for a period of time and then offer a small amount of money as a final settlement payment. The advice would most likely not work because credit card companies are getting tired of 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 correct way!
Never stop paying your debt collectors
If you are struggling to maintain the minimum payments telephone or write to your credit card providers immediately and ask them to reduce the payments. If you have great credit score and an excellent reason for having monetary difficulties such as a salary cut, loss of hours, annulment, separation etc, they are likely to help you. If you stop payments they'll instantly start being tougher on your account and you'll get nowhere trying to negotiate with them.
Prepare a financial budget
OK it isn't the answer you were looking for but you cannot hope to get out of debt if you're not certain of your present situation. You should know what you spend your money 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 out of your jobs, your benefits, interest on financial savings and so on. You also need 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
With any luck you would have found some extra cash by working through your current incoming cash and your 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 good way to repay some credit card debts. Have you any abilities you can use to generate additional cash? If you can type you could get paid for writing articles or reviews. In case you are great with animals offer to dog sit? Can you work extra 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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