When times are tough economically, more and more people find themselves out of options. They are drowning in debt, and bankruptcy is an appealing way to deal with that problem. When you’re at the end of your rope, you’ll do whatever it takes to hold on, no matter how much a bankruptcy might hurt your credit score in the long run.
This is especially true when you’re facing large credit card bills. The fact of the matter is that credit card accounts are unsecured. This means that the company can’t come and repossess your car or house. It also means that you have less motivation to figure out how to deal with it, at least when compared with something like a car payment or mortgage payment.
Programs can help
Bankruptcy, however, isn’t the only solution. Many banks and financial companies are offering their credit card customers a way to keep out of bankruptcy and still keep their accounts current. The companies are offering programs and arrangements that may let consumers out of things like late fees and charges.
The trick is that you actually have to talk to the creditor. They’re probably not going to call you up out of the blue and offer you the best possible deal. In some cases, they may contact you to let you know about specific programs, but you can’t count on it.
What they can do
Depending on the particular lender, there might be a number of options available to you if you’re behind on your credit cards. Here are some of the kinds of things you may find that the credit card companies can do for you:
- Make a payment arrangement. Some will let you pay less than the minimum amount due for a certain amount of time without penalty.
- Lower your interest rates temporarily. While you’re not likely to see a permanent reduction, some companies will allow you to reduce your rate or even stop charging interest for a short period of time while you get caught up.
- Forgive fees. They may be willing to drop late or over limit fees from your account, as well.
- Settle for a lump sum. Some companies will accept a lump sum payment, often as little as 50 percent of your balance.