, The attorneys of Newman Williams PC ,

Stroudsburg, PA, credit card debt forgiveness

On Behalf of | Feb 12, 2021 | Bankruptcy Law

It is not uncommon for people to find themselves overwhelmed with credit card debt. When those individuals hear about the concept of credit card debt forgiveness, they envision a reality in which all their debt magically vanishes. However, that is not how credit card debt forgiveness works, and consumers in Stroudsburg, Pennsylvania, should educate themselves on the process.

What is debt forgiveness?

If you are behind on credit card payments, the credit card company has probably transferred your account to a collection agency. For instance, let’s say you owe $15,000 in debt and find yourself six months behind on the payments. You may be able to negotiate that debt down to $10,000 with the collection agency.

This does not totally absolve you from the remaining $5,000. Instead of paying the collection agency this amount, you will pay taxes on it. But that portion of the debt is “forgiven.”

Avoiding collection agencies

If you are at risk of falling behind on credit card debt, you should contact your credit card company before it brings in a collection agency. You and the credit card company may be able to negotiate payment terms that do not involve the use of a collection agency.

Other options for credit card debt

You should explore all your debt forgiveness options, including balance transfers and debt consolidation. While these methods all have their pros and cons, they put you in a position to get a handle on your credit card debt.

If you find yourself with no other options, you may have to file for bankruptcy. The process is a largely legal concept, and consumer bankruptcy law carries with it a great deal of legal and personal ramifications. If you opt for bankruptcy, you should consult with an attorney who can help guide you through the bankruptcy litigation process.



FindLaw Network