North Carolina residents often face various levels of credit card debt. There are ways that debtors can try to improve their financial situation. In attempting these methods, it is important to understand how bankruptcy compares as a solution.
Clearing credit card debt takes work, and there are strategies that may be effective. Paying more than the minimum amount due can help to reduce the debt faster. The debt snowball strategy involves paying the smallest bill off first. Then, once that is paid, the debtor will move on to the next smallest bill. This is compared to a snowball increasing in size until the debt is eliminated. Debt avalanche is similar except the higher bill is paid off first. Automating the payments is a relatively common option when paying credit card debt. It can help debtors avoid forgetting to make payments when they are due.
Consolidating debt is a time-tested method because it lets the debtor combine their debts into one payment. Some credit card companies offer a 0% balance transfer for a specified period. This could save money in the long term. Taking out a personal loan may also be effective even if there is an interest rate as it could be cheaper than other tactics. Some creditors are willing to negotiate. If the debtor has a good history of paying on time, explaining why these changes are needed could yield positive results.
Finally, debt settlement and bankruptcy are legal ways to get on stronger financial ground. While debt settlement sounds like a good idea, if the creditors do not want to negotiate, the debtor could be in a worse situation than before. Bankruptcy might be a frightening prospect, but a Chapter 7 liquidation can clear the entire unsecured credit card debt and let the debtor restart his or her financial life. A Chapter 13 sets up a payment plan in which the payments are sent to a trustee who distributes the payments to creditors. For advice and legal representation for debt relief and bankruptcy, consulting with a legal firm experienced in bankruptcy and debt relief might be helpful.