PHOENIX–(BUSINESS WIRE)–As credit card use increases in the face of rising prices, Americans are faced with rising levels of debt, leaving them searching for ways to regain control of their finances.
“If our current economic climate causes you to see your debt balance increase, there is hope in the form of several viable options to begin to get back on a solid financial footing,” said Amy Maliga, financial educator at Take. Charge America, a non-profit credit counseling and debt management agency. “The hard part is deciphering which option is best for your unique situation.”
Maliga explains five options available to combat rising credit card debt:
- Credit advice: A free service provided by non-profit organizations, credit counseling helps individuals discover the options available to overcome their debts. Online or by phone, you receive a personalized action plan to guide you to the best debt relief solution for your situation.
- Debt management: A debt management plan is a relief solution offered to eligible people who go through a credit counseling session. If you qualify for a DMP, it can help you save time and money when paying off your debts. Benefits include lower monthly payments, lower interest rates, waived fees, and the end of collection calls.
- Debt Consolidation: It is a process involving the combination of several debts into a single new loan or line of credit with the aim of reducing the number of debts to be paid and saving on interest. You can consolidate most types of debt, including credit cards, student loans, auto loans and more.
- Debt settlement: Offered by for-profit companies, this service allows individuals to repay only a portion of their total debt. This process often involves waiving payments so that the for-profit agency can negotiate a settlement amount. This can have a negative impact on your credit score and you may have to pay taxes on the amounts given.
- Bankruptcy: An option of last resort, bankruptcy is a legal proceeding that can help you repay or discharge your debts under the protection of federal bankruptcy court. There are two main types of bankruptcy: Chapter 7, also known as liquidation, and Chapter 13, also known as reorganization. Although bankruptcy can help you eliminate certain types of debt, including credit card debt, other debts cannot be discharged, such as student loans or spousal support. Bankruptcy seriously affects your credit and your ability to open new credit cards or get new loans.
For additional resources to tackle debt and improve finances, explore Take Charge America’s Budget tools.
About Take Charge America, Inc.
Founded in 1987, Take Charge America, Inc. is a non-profit agency providing financial education and counseling services, including credit counseling, debt management, student loan counseling, housing advice and bankruptcy advice. He has helped over 2 million consumers nationwide manage their personal finances and debts. To learn more, visit takechargeamerica.org or call (888) 822-9193.