Legally Eliminating Credit Card Debt Takes Work

In order to legally eliminate credit card debt, you will have to do a fair amount of work. Here are some methods that you could use. 

Increase Payments

One way that you can eliminate your credit card debt is simply to pay it off over the long term. In order to do this, you may need to supplement your income. Take on a second job, sell something, or find some other way to increase your income. The extra income that you make should be directly applied to the balance of the credit cards. This will be one of the slower methods that you could use, but it will ultimately be one of the best methods as well. It will save your credit score and will get rid of the debt. 

Debt Settlement

Another way that you could legally eliminate the credit card debt that you have is to go through a debt settlement. This process involves negotiating with the credit card company in order to eliminate the debt. This process usually only works when you have already fallen behind on your payments. After several collection attempts, the credit card company may be willing to settle. With this method, they will often take quite a bit less than what they are owed. In fact, sometimes they will take less than half of what the credit card balance is. In order to do this, you will have to pay them with a lump sum in most cases. 

While this strategy will help you legally eliminate the debt, there are some consequences that you will have to deal with. For one thing, it will damage your credit most of the time. The credit card company will note this settlement on your credit report, and it will eventually lower your score. In addition to this, you will be responsible for the taxes on the amount that was canceled. The IRS considers this taxable income, and the creditor will report it to them. 


Bankruptcy is another option for legally eliminating credit card debt. This should be the last option that you consider because it leaves the most lasting negative impact. If you file for bankruptcy, your credit card debts could be effectively eliminated, but your credit will basically be decimated. A bankruptcy will stay on your credit report for approximately 10 years from the date that you were awarded it. This means that it will be virtually impossible to get another credit card or purchase a house or any other big ticket items during that time period. Although legal, this method of eliminating credit card debt should be undertaken only if necessary and after serious consideration of the consequences. 

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