Are there any programs for single mothers dealing with credit card debt?
Although there are no formal debt services for this type of situation, many credit card companies will offer settlements to hardship cases such as this one. There are also financial assistance programs available for single mothers who need more income through the federal and state government. To see if debt settlement or debt counseling are right for you, simply fill out a form and receive a free consultation from a debt professional .
What is a financial hardship?
This, like the situation mentioned above, refers to any set of circumstances that are beyond someone’s control that may cause them to need help paying their bills . Some other common financial hardships include medical conditions, income reductions from unemployment or a business failure, and divorce.
What options do I have for help?
There are two main categories for help with credit card debt: doing it yourself or using a third party. For consumers who are bothered by interest charges but feel that they can afford to pay more than the minimum payment, chances are using a company for debt reduction assistance is not necessary. On the other hand, if your problems are more serious and managing your payments is more difficult, turning to the help of a credit card debt relief agency may be a better solution.
Types of Debt Relief
Debt management companies mainly come in two different forms---credit counseling agencies and debt settlement firms. Both are able to reduce the timeline until you are able to become debt free, as well as your payments. How they go about doing this is very different, however.
Debt Settlement
Debt settlement is also referred to as debt negotiation, and it is a process that aims at reducing the total balances owed on credit card debt. These types of programs typically last 12-36 months, but it is also possible to reduce the timeline even further if you are able to come up with a lump sum for settlement. In order for the credit card companies to be willing to negotiate, however, a consumer must voluntarily fall behind on their payments. The reason for this is simple: creditors will rarely negotiate on a balance if the account is current because they are getting paid according to the terms they stipulated. In other words, they have no incentive to lower the amount you owe because they are making money. Falling behind on your payments does affect your credit score or rating negatively so debt negotiation is typically only an appropriate solution for consumers who are experiencing a financial hardship and cannot afford their payments. Settlement is also a great option if you have old or bad debt.
Credit Card Counseling
Credit counseling involves working with non-profit debt consolidation agencies (some are for-profit) to get credit card companies to lower your interest rates. The average program typically lasts between 4 and 5 years. Due to the fact that the credit card balances are not reduced, the monthly payment in credit counseling can be high, and therefore, affording this type of program can be difficult. Like debt settlement, however, this type of program is reported to the credit bureaus, so it can also have a damaging impact on your credit report.
Self-Debt Management
There are two keys to providing credit card debt assistance yourself: 1) You must pay more than the minimum payment . Given the fact that interest rates on credit cards can be so high, paying down the debt by simply staying current can be next to impossible. A part of being committed to becoming debt free is devoting as much as possible of your monthly income to your credit cards. 2) Develop a budget and stay disciplined. Chances are your income is limited, so the easiest way to be able to devote more money to your debt is to cut back on your monthly expenses.
If you aren’t disciplined enough or lack the income to pay off your debt on your own, simply fill out a form and let PayingPaul.com matched you with a leading provider of credit card debt consolidation without a loan.