I've probably mentioned many times already how I've found myself in credit card debt several times in my life. This is not a good thing (except at very low interest; see a previous article). Credit card debt is considered an "unsecured debt" and used to be discharged when you successfully filed for bankruptcy. But starting in 2005 the law changed and unsecured debt is no longer simply erased when you file for bankruptcy. But you can still eliminate credit card debt if you are willing to develop a simple plan of action, and then stick to it. You can undertake this journey to financial freedom by yourself or in conjunction with a partner (I suggest a law firm, see previous posts). Law firms can negotiate your unsecured debt with creditors and can often drastically reduce the amount you owe to them. These creditors will, however, still want some sort of settlement amount in order to agree to this debt reduction. Your attorney can negotiate this on your behalf and then should get your approval before settling on a given account. When the settlement is done you will have to pay a small amount monthly for a short period in order to fulfill your half of the settlement agreement. But your attorney will negotiate monthly payment based on what you tell them you can afford. Of course the attorney will want a fee for his services, but the total outlay for getting rid of your debt and paying the attorney should be somewhere around 50% of what your initial debt had been. That's a considerable savings. Here's an example:
Let's say you owe $10,000 on credit cards. The attorney should be able to negotiate this down to below 50%; he then adds his fee and you owe $5,000. This is then divided up in to payments based on your individualized plan. In this case we'll say for two years. You would then owe around $208 per month, totaling $5,000 when completed.
Now this is a substantial savings, but it really is even greater than it seems. If you had left the debt standing for that two year period at a typical interest rate (let's say 20% for this example) then your debt would have skyrocketed to $14,400! In this light your savings is even greater, by setting out on a real plan of action you have saved yourself $9,400. That's a potential $14,400 debt settled for $5,000, attorney fees and all!
Of course, this is just an example, and real world results may very slightly, but this really is a typical result which the average debtor can expect. Just be sure to deal with someone reputable, and then stick to the payment plan. If you do this you will see yourself rebuilding your credit almost right away.