Experiences with reducing/escaping credit card debt?

[cthulu2016]

This is probably a topic of interest to many. Have you escaped large credit card debts, entirely or reduced through negotiation?

I don't mean by paying them off 100% or not having CC debt in the first place. (Both of those are rather obvious.)

I mean where circumstances arose such that you could not plausibly pay them off, or even service the interest.

I'm talking about renegotiation, principal reduction, bankruptcy, etc..

How did it work? What was your experience like?

[uppityperson]

1. Kick to mark to read later.

[Ruby the Liberal]

2. If your credit is good,

(including your history with the existing bank) call them up and ask them to reduce the interest you are paying and if they won't, tell them that you will just pay it to someone else for a while and then transfer your balance to a card with an introductory rate.

I know it has worked for people (asking), but if you do transfer, pay special attention to the small print on rate increases/timing, and don't transfer too often, as that can leave a mark.

It costs nothing but a phone call to try.

[frustrated_lefty]

3. Declared bankruptcy 2 years ago.

Lost everything to Katrina back in '05, followed by a divorce shortly thereafter. I simply couldn't make the minimum payments. You can find some calculators online which will give you an idea how long you'll be paying at a given rate. Here's one: http://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx There finally comes a point where there's no crawling out of the hole.

I found a lawyer who would take installment payments for 6 months, roughly $2500 in total. At the end of that time, he filed the necessary paperwork and we went through the bankruptcy proceedings. It can be relatively painless assuming you've made good faith effort to pay your debts. It's certainly humiliating, and you want to have a budget lined out to insure you'll be able to live within your means afterwards. Sometimes it's the only way, though.

[Initech]

4. I'm about to tell Wells Fargo where they can stick it.

[SoCalDem]

5. My best friend did it several years ago. It was surprisingly easy for her

If your debts are more than your assets or ability to pay, and your income meets qualifications, you can still declare bankruptcy.. (states have differing rules)

Within MONTHS, she was already getting offers to get credit.. *she refused them all..

If you do not plan to buy a house or car anytime soon, it's not all that "tragic".

I would suggest going on line and researching your state laws, and setting aside some money to pay for the legal part of it..

[think4yourself]

6. I started doing this last year

My bank (SunTrust) offers online bill paying. They have an option for recurring bills. I send a payment to them all every WEEK to each of the CC companies I owe. Instead of one big check monthly, I send them 4 equal payments. This helps to bring down the principal a little faster too.
I just paid off BofA. Man, that felt good.

Looking forward to hearing others' tips!

[L0oniX]

7. Wife in auto accident & can't work ...owes 10g ...can't pay ...went for debt consolidation.

Don't know if it is going to work but if any judgements or liens are placed we will back out of the consolidation deal. Recently passed laws have enforced FTC rules on debt consolidation companies.

[hunter]

8. Negotiate. If you can't pay, you can't pay.

Medical bills pushed us over that cliff.

In a civilized nation with a modern health care system maybe I'd still be a good customer of the credit industry; I might still think about my "credit rating."

But I'm done with them now. I throw their offers to "rebuild my credit" into the shredder and smile. I'm not going down that path again.

[Panasonic]

9. I am in a debt settlement for the last 20 months

I can't complain.

I have saved over 65% of my bills balance by letting it slide for more than 4 months, and letting my debt settlement do the work. Basically, the debt settlement wait for the companies to turn it over to third party collection to go after me - then they work from there.

I have locked into a 3 year contract to pay off about 85% of my debt, because most of each debt are over the $500 balance requirement.

I've had two litigations (even had process server serve me papers) settled before the hearings, and the company that does the debt settlement actually did all the necessary work - even had an in-house law firm to do the paperwork and send it to me to file pro-se.

It costs money to answer, but the end results has been very satisfactory.

And these people are terrific and very hands-on.

The company is called Superior Debt Services - www.superiordebtrelief.com

[HopeHoops]

10. Bankruptcy (chapter 7) is often the best approach and usually raises your credit score.

I know that sounds counter-intuitive, but it's true and bankruptcy lawyers will tell you that. Get a free confrontation to discuss it.

[aikoaiko]

12. I love the accidental use of confrontation instead of consultation.

awesome.

[HopeHoops]

13. LOL!!!! I'm not going to edit my post because that's fucking hilarious. I had to go back and look.

[pkz]

11. *WARNING* please read

If you settle and pay less than the amount of the outstanding balance due....say the balance is 3000.00 and you agree to pay 1500.00 to settle, the remainder (1500.00) will show up on a 1099 come tax time. The IRS calls this difference INCOME and is added to your return, taxed as such. There is a way to get out of adding it (insolvency) but oh baby....they make it real hard on ya.
And....if you do not add it, they will audit you. I do taxes for folks and one lady forgot one of her 1099's whoa.......been working with the IRS for her for months.

[Incitatus]

14. I know this isn't an option for some, but if you do have a 401k

you can usually take out a low interest loan 3% or so and pay off high interest debt. Only do this if you are certain you can control the urge to rack up more debt on needless stuff.
Statistically. most people end up in the same place within 2 years for that reason.

[Oilwellian]

15. We got in credit card trouble a few years ago

We managed our payments just fine until we co-signed a loan for my son's first car and he was late on one of his payments. That jacked the interest on our credit cards up to 28% which left us in the futile position of paying mostly interest on these debts. We took the plunge and bit the bullet for 3 years after deciding to go the credit counselor route. They lowered our interest on the cards down to 9% (except one who wouldn't budge) and we paid all of the debt off, while saving thousands of dollars at the same time.

Taking this route instead of bankruptcy allowed us to regain a good credit rating in 3 1/2 years instead of the usual 7 years with bankruptcy. Never again will we be so foolish to rack up so much debt on credit cards. We now just have 2 and never charge more than we can pay off in 3 months time.

This is the consumer service we used. They were great to work with and it was a fairly easy process to go through.