"Robbing Peter To Pay Paul" - balance transfers, consolidation loans, help from family and friends. The inherent problem with these options is that you do not actually get out of debt. Instead you transfer it to another place at a presumably lower monthly payment or interest rate. Worse yet, with consolidation loans in particular, oftentimes you will need to use your home as collateral in order to qualify. That means as little as one missed payment could jeopardize your home. In light of our country's past problems with home foreclosures this is a dangerous and a less favorable alternative to bankruptcy.

Less Than Perfect Credit Services

Debt settlement - For consumers who are overwhelmed by their debt load, credit card debt settlement, also known as debt negotiation or reduction, may be an appropriate way to help with your debt problems. In a debt settlement service, a company negotiates with your creditors to lower the actual amount that you owe. It is a very fast and inexpensive way to help pay off your debts.

Credit card debt counseling - Credit counseling does not aim at reducing your principal debt, but it is successful at lowering interest charges and payments on credit card debt. Although not as cheap and fast as settlement, credit counseling is another option for getting credit debt help.

Credit Card Debt Help Questions

1. Is there such thing as government debt help?

In the form of loans or services, there is no such thing as government help for credit card debt (except declaring bankruptcy, of course). However, many local and national government agencies offer publications and information that can be helpful for debtors. The FTC in particular provides a lot of useful information for consumers.

2. Is there such thing as credit card assistance for students specifically?

Unfortunately, no, there is not. This type of program exists exclusively for student loans (through deferment programs, forbearance, etc), but not for credit card debt.

3. I am getting harassed daily by debt collectors. Is there anything I can do?

Yes, the first recommendation is to become better acquainted with the laws pertaining to debt collection agencies called Fair Debt Collection Practices Act (FDCPA) . As a debtor you have a wide range of rights and protections that can get collectors to minimize their calls. First and foremost, you have the right to demand them to Cease Communications with you. If you do this in writing, the collection agency is legally obligated to stop calling you. Industry experts generally recommend steering clear of this move because it can lead to aggressive collection activities like a lawsuit.

4. So I can be sued for past due or delinquent credit cards?

Yes. Keep in mind that many creditors do threaten or hint that they intend to take this action more often than they actually do. The common language they use is "to keep this account from moving forward" or "before any further action is taken" can mean a wide array of things---from sending the account to collections or charging it off.

5. I need help determining which third-party service to use credit card counseling or debt settlement. What do you recommend?

This depends mostly on your situation. My main suggestion is to do your homework and talk to several different companies prior to signing a contract. You can get matched with a pre-qualified debt consolidation service here.

6. Do you recommend borrowing against my 401(k) to pay off my unsecured bills?

Depending on the interest rate you are being charged, this could be a good choice, and it is definitely better than doing any early withdrawals. If this is an option, however, one must beware of the potential downsides. The main thing to remember about using this type of debt option is that you have to pay back the entire bill within 60 days or face a large tax bill. So a lot of using this depends on your job and income stability because if you suddenly become unemployed or have a slow month (assuming your job is in sales) you may not have the money to pay back the loan in time.

7. What do you think about taking money out of my IRA to get rid of my credit card debt?

This is normally not advisable because of the penalties and tax implications of this option. Unless you are over 59 ½ years of age, you will be subject to a 10% early withdrawal penalty. Given the number of debt relief options out there, it rarely makes sense to pursue this alternative.