- 1). Enroll in a debt management plan with the help of a nonprofit credit counselor. Agencies such as Consumer Credit Counseling Service (CCCS) of greater Dallas can act as an advocate in talks with credit card companies. Authorize the agency to act on your behalf in seeking lower interest rates, reductions in fees and reversal of some finance charges on credit card accounts. These actions will help stop credit card debt as an individual commits to a required four-year repayment plan through the counseling agency.
- 2). Make one lump some payment to the agency each month covering all bills and the agency will send out checks to all creditors. The goal is for an individual to emerge from the program with credit card and other unsecured debt eliminated or greatly reduced. There are CCCS agencies throughout Texas; check the telephone directory for listings or search online. Seek referrals for other counseling agencies from community organizations such as the Houston Urban League or the United Way of San Antonio and Bexar County.
- 3). Begin debt settlement. Numerous for-profit companies in Texas specialize in debt settlement, but the Federal Trade Commission says an individual should manage this because firms are often unreliable. Debt settlement allows a person to pay off credit card debt for less than the full amount owed. Generally, credit card companies will entertain settlement offers once a person has fallen four or five months behind. At six months, these companies usually close accounts, list them as charged off and sell them to debt collection companies. Before that the credit card companies often will settle for less than the full amount. According to The New York Times, card companies will sometimes accept as little as 20 percent of the balance--an 80 percent savings and an ideal way to stop credit card debt.
- 4). File for bankruptcy. Bankruptcy is an effective but extreme tactic for stopping credit card debt. With Chapter 7 bankruptcy, eliminate all credit card debt within just a few months. Another option is Chapter 13, which is better for homeowners because it allows people to keep homes during a five-year repayment plan to all creditors. At the end of the five years any remaining credit card debt will be discharged or eliminated. File for bankruptcy in Texas, seek the advice of a private bankruptcy attorney or seek free or discounted legal help by contacting organizations such as the Dallas Bar Association or Legal Aid of Northwest Texas.
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