The first step is to examine what is known as the statute of limitations in your particular state. Most states in the US place a seven-year limit on when a collection agency is able to take you to court to get a judgment against you to pay an outstanding debt. If you have debt that is older than seven years, the collection agency or creditors can no longer sue you for the money. In fact, these debts will no longer appear on your credit report. While creditors may threaten you, they have no true recourse for any debt you may have that is older than the statute of limitations.

Another way to negotiate with creditors is to offer a settlement. This is especially effective when it comes to unsecured loans such as credit card purchases. The longer you have owed the less you will have to pay in a settlement. The average settlement is usually about one third of the original debt. While the collectors at first may ask for more, it is best to hold out until they agree to the payment of one third. Another important factor to keep in mind is to get any agreement you make with a creditor in writing before making a payment. A verbal agreement over the phone is not enough to ensure that the collector will meet their end of the bargain.

There are many ways to negotiate credit card debt that will not lead you down the path to bankruptcy. It is important to keep careful records as to when you speak to the collection companies and what has been said. In fact, if possible it is best to communicate only in writing. Once you open the door to settlement, the calls will eventually cease. By holding out for the least settlement amount and not agreeing to make payments over time you will walk away with a much better deal in the long run.

Create a budget
The first step in eliminating credit card debt is to create a budget. If you have already done this then you are ahead of the game. If not, spend some time working on this important step. The reason that a budget is critical is that you want to understand exactly where your money is going. In order to quickly get out of debt, you may need to stop spending money in areas that is now less important. For instance, it may make sense to shut off cable for the time being until you have some breathing room. By freeing up some cash that otherwise spent, you are now in a position to apply the money to the credit cards.

Create an emergency fund
Save up enough money to account for any emergency that may come up for instance car repair. It is important that you stop using credit in this process. The amount required depends on your overall budget but should be around $1000 at least. This step may take a little time but will be pivotal in allowing you to stop using credit and focus all of your resources to getting out of debt.

Layout your credit card statements
After you have created your budget and are committed to sticking to it and have a funded emergency fund, you will want to find all of your credit card statements and line them up from smallest balance to largest. An important point here is that you really don’t care about the interest rate of the respective card. The reason is that you want to get some early success by paying off a loan. By focusing on the smallest balance you can achieve an early win, which will then provide some momentum meaning you will be more likely to stick to it for the long term.

Attack your debt
After you have paid off the smallest credit card, take that payment and now apply it to the balance of the credit card that has the next lowest balance. Now, you are really starting to pick up some speed. With each credit card that is paid off, be sure to take that payment and apply it to the next one until all of your credit cards have been paid off.

At this point, you will want to consider closing some or even all of your credit cards. Ideally, you will not them any longer. If you are unsure, just keep one open for the time being. Continue to build up your emergency fund which will make a credit card less of a concern. Lastly, this process can take some time depending on how much debt you have but it is proven to be the best way to get out of credit card debt.

Where to begin
The first step is to make a firm decision to accomplish this task, no matter what stage the debts are in. The second is to set out a clear budget for paying all credit lines down, and the third is to communicate this to the creditors. There may be situations in which settling an outstanding balance or declaring bankruptcy is the easiest way to handle overwhelming accounts, but the goal is to prevent the problem from growing this large.

Create a written budget
Arrange a credit card budget by making a list or spreadsheet of all credit lines. The list includes amounts currently owed, interest rate, minimum payment and due dates. Prioritize the largest balances first, or if they are close, prioritize the highest interest rate first. This is the account which will receive the largest payment; the rest will get the minimum or the amount you can afford to pay.

The large payment may be twice as much as the others or more, this is up to the debtor. The account holder needs to allocate funds to go towards paying down this one card faster than the rest. Possibilities for coming up with this extra cash include sacrificing a leisure activity or home luxury, generating additional funds from a job or second income stream, or simply using money which used to be paid to other accounts.

Establish communication with the credit card companies
Once the budget is set, call creditors. Explain the situation and let them know your plans, especially if an account is past due or has gone to in-house collections. The issuing company needs to document your account if it is past due and is not being collected on. If it has gone to collections in-house, communication is important to prevent the account from being permanently closed and sold to a third party collector.

With this plan, when the balance on the prioritized card is at zero, the additional funds are shifted to the next priority account, and so on until every card is at zero. This type of plan is what is often referred to as the debt snowball. Do not close the cards if the bank has reinstated your good name but only if you can stick to your budget. If you think that they card are too tempting to use then close them. However, open lines in good standing contribute to a healthy FICO score and a good score will help when trying to buy a home.

Third party collectors
Accounts which have been sold to a third party will settle for pennies on the dollar. Verify the company’s right to collect on the debt, and if proof is provided, settle the debt and move on. While this is not an ideal situation, the marks on your credit report will disappear faster than a bankruptcy.

Debt snowball
For some people the best way to eliminate the debt is to put the family on a very detailed budget. Stop using the credit cards and make a plan to pay them off one at a time while continuing to make minimum payments on all the other cards. This could entail getting a second job or a spouse taking a part time job. This option has worked for thousands of persons and has the least impact on the ability to get credit in the future.

Debt consolidation
A debt consolidation loan may allow you to pay off the debt. Persons that own real estate may qualify for a second mortgage or refinance of their home. Just be cautious that you stop using the credit cards. Many people have fell for this trap and now owe money on the loan as well as credit cards that are maxed out once again.

Negotiation
Some people find that the work of a service offering negotiation is helpful. The service may contact creditors and negotiate balances as well as interest rates. The person in debt will be required to make monthly payments to the agency that is the distributed to the various creditors. Negotiation can have a negative impact on your ability to get credit in the future, but is less harmful than not paying the debt or filing for bankruptcy.

File for bankruptcy
Bankruptcy should be used as a last resort. Persons with limited assets may file for a no asset bankruptcy and have the debt completely eliminated. Persons with real estate or other holdings may find that their property must be liquidated or they must agree to monthly payments for three to five years. The good news is that with the payment plan, debtors keep their assets and pay as little as ten percent of the entire debt. The bad news is that bankruptcy can remain on your credit report for up to ten years and leaves a permanent court record.

There are ways to legally eliminate credit card debt. The above ideas can give you the needed financial relief for your life.

By utilizing the help credit card companies have to offer you will have saved some time, for they already have all the necessary pertinent information about you. You will need to provide them with an accurate debt picture, for they may not have access to all your debt. So, prepare for the planning session with a list of how much you owe, what the current credit card interest rate is for the other debts you have, your minimum monthly payment, and whatever fees have been applied to the other accounts. By having compiled all this information yourself, you will have a good understanding of what you are facing as you discuss it with the credit counselor from the credit card company.

Here are some guidelines to work towards in you plan to negotiate credit card debt:

1. Request a lower interest rate. If you have been consistently making your payment on time each month you might find that the credit card company will readily do this for you. Expect a reduction of up to 2% less than you’ve been paying. Don’t disqualify yourself from this step because of a few late payments. It never hurts to ask, and you might be rewarded for your efforts. The worst they can say is no.
2. One way to help the negotiation process is to draw up a simple payment plan that will fit within your budget. The credit card company should see that you are willing to repay the debt and that you attempting to work with your means. In fact, they may offer some help for this step. As you prepare this plan look to a five year schedule to eradicate the debt entirely.
3. Ask for the removal of any fees that your account has built-in to it, such as late payment fees and fees for using the ATM. You will find that many credit card companies will hang on to these fees tenaciously, but there are some who will agree to waive them for you. Again it will not hurt to ask.
4. Offer the company a settlement in the form of a lump sum of 25 percent of the total balance.
5. Whatever plan you finally agree upon, get the plan in writing. If you have been successful in this attempt to negotiate credit card debt you will want any agreement about interest rate, waived fees, and your payment plan down on paper and signed by both parties. This will be your proof of the negotiation and may come to save you some grief in the future.
6. You might find that even though you have valiant in all your efforts, the credit card company will not agree to anything that you offer. At that point, go to a reputable credit counselor who may be able to secure what you can’t with the credit card companies.

These simple steps can go a long way towards helping you negotiate credit card debt and ease the suffering financially that you have been experiencing. It is your financial life that you are dealing for and you deserve the best you can get.

What can the small business owner do besides bankruptcy in these circumstances? Here are some ideas to consider if you find yourself in this situation.

1. Develop a plan.
   Determine your total business debt. Sometimes it is good to write it out with the following information:
   • The amount of the debt
   • Who the debt is to
   • What are the rates of interest and are there any hidden fees
   • All the account information – account name, number, contact person(s), etc.
2. a.  If you still have your business, work on paying off the business credit with the lowest balance first.
   This action will clear up that account quickly. It will provide you with a sense of accomplishment and it will also help your credit score. Remember to maintain, as best as possible, the other accounts by paying minimum payments for a while. Once that first business credit card is paid off, reanalyze your debt and begin paying off the next card with the lowest balance by taking the payments from the paid off card and applying them to this account along with the minimum payment. Soon that business credit card will be paid off. Continue with that program until all have been paid off.
   b.  If you have closed your business, take care of your personal finances first.
   You may have to do some sacrificing where possible. You also might have to take on extra work if available. Next, communicate with your personal creditors see if they will work with you. Remember this, they may not know of what you have been going through and they need to know, because you have made them a promise to pay and you owe them any explanation of any change in your situation. Ask them if they will remove any late fees and waive any annual fees on your accounts. They may help you make a new payment plan that might be extended to help you out of this present circumstance.
3. Look for a debt negotiator.
   These people are professional financial counselors that are quire capable of helping you map your way out of this business credit card debt problem. Your business attorney may be able to steer you in the right direction to find someone best suited for your type of debt.

Remember, bankruptcy is not the first thing to consider when your business goes sour. A debt is a promise to pay, and nothing can help you business credit card debt better than working out a means to do just that. It will help you maintain a good name for you and your business.

However, that is not true if you discover a few simple truths about family budgeting and settling credit card debt. There are several things you need to consider when settling credit card debt.

• The numbers that really matter most about settling credit card debt are the total amount you owe and what is the rate of interest that your credit card company is charging you.
• Find any discretionary income, like money from your savings account, and apply it to the credit card balance that carries the lowest balance. It is easier to pay that one off first, and you will be able to celebrate an early success in your plan for settling credit card debt.
• Stop using your credit cards and if you have a tendency to getting a cash loan from time to time, try to stop using those as well. Focus on spending less. You cannot bail out a boat that continues to have a hole in its bottom. There is nothing worse than attempting to eradicate your credit card debt while continually adding to it.
• Get in touch with your credit card company. If you have gone through an unexpected employment reversal and have either lost all income potential or have had it greatly reduced, you must inform your credit card company, for they are completely unaware of your circumstances. They want you to be able to pay your debt to them, they may be able to help by lowering your interest rate or outright forgive some of your debt. In any case, it is worth communicating with them.
• If you are able to do so, double or triple the amount you pay on your monthly credit card statement. Whatever you do, do not pay the minimum amount, for all that does is lengthen your time in debt and adds to your creditors’ bottom lines.
• Learn how to establish positive cash flow for your family. Budget software abounds and is available from many sources, some even as free downloads from the internet. Get a strong grip on where your money is going and plug up the leaks. Practice frugality by dining out less often, repairing instead of replacing, and basically cutting back in many areas of your lifestyle.

If you are still incapable of settling credit card debt by yourself, seek out a reliable debt negotiator or counselor to assist you. You can break from the twenty-first century bondage of credit card debt beginning today.

Next is something that appears to be fading quickly in the credit world. One of the easier ways to go about legally eliminating credit card debt in the last decade was to do balance transfers. If you can obtain a credit card with a 0% rate, jump on it and transfer the balance of your 25% APR card to the new one. This is not as easy as it once was, but you might be able to do it. If there are no 0% rate cards available, you can still transfer the balance of the high percentage card to one that is not quite as high. However, be watchful for any prepayment fees or other fees that may be hiding in the fine print.

If you are one of the fortunate few these days that finds himself with a raise, apply the extra income to your highest interest rated card balances first if you cannot do anything else with them. As you pay off the highest interest rated cards, you will be able to apply more money to the other balances.

One other rule of thumb for eliminating credit card debt is to pay off the balance of the cards with the lowest balance first. These balances should be easier and faster to eliminate. When you have accomplished the grand payoff, celebrate by developing a continued strategy on the remainder of your credit card debt. You will experience some much needed euphoria and help under gird your financial self esteem, not to mention the fact that you are moving along the plan for eliminating credit card debt once and for all.

Also, remember that debt means a promise to pay. The most secure way of eliminating credit card debt without bankruptcy is to ‘bite the bullet’ and pay the debt. Don’t get sucked into the trap of paying minimum payments. If anything, double up on the principal of each payment by at least one payment and you will save yourself a lot of interest money in the long run. The burden of paying off the debt is time. It will take a long time unless you have a means of earning more income through a second job.

Here is a collection of a few pointers to help erase credit card debt.

• Make a cash flow log. Track where the money goes each payday. There are a number of computer programs for doing simple household bookkeeping, like Quicken or Microsoft Money Plus. If you are not computer savvy, keeping a cash flow journal with a pad of paper and a pencil will do nicely.
• Apply any extra money that comes in to the household to the debt balance. Garage sale proceeds, a temporary part time job, money gifts, and even your tax return can help erase credit card debt.
• Establish a timeline target for zero credit card balance. This is a tough one, but will keep you at it for the long haul. One of the more interesting scenes in the old movie about Sergeant Alvin York was when he worked at extra jobs and saved towards the purchase of that prized bottom land. He would continually look to the target date when he needed to have it to spur him on to work harder to increase his savings. We can put a date on the calendar and plan and work for that goal also.
• Use the best way to get out of debt the ‘Snowball System’. Put your extra money onto the debt with the least balance. That pays that credit card off first. Once that card is paid off, take the extra money that you used to pay off that debt plus the minimum payment for that freed up card and begin to apply that total amount to the next lowest credit card balance. Keep doing this until you have erased the entire credit card debt. That is the ‘Snowball System’ in a nutshell.
• Develop a positive attitude about erasing credit card debt. When you believe in yourself, even the most seemingly impossible goals can be attained.
• Cut spending. Think frugally. It is far less expensive to dine in than to dine out. One of the more rewarding areas is learning how to use leftovers in a creative way. In fact, it is quite enjoyable to see how many different ways you can decorate without spending a great deal. Be creative!!
• Cut up all your credit cards save one, and put that one in a safely guarded place where it is not easy to get at it. Don’t cancel your credit cards, just don’t make them available to use. This way you will not add to your credit card debt.

There are many other ideas, but with these pointers you may find new and creative ways to finally erase credit card debt in your household.

One of the first major changes is to deal with our credit card debt. Debt elimination is extremely important if you desire to ever have financial independence. Debt is a promise to pay. Paying your debt is the only real way to settle credit card debt. Don’t wait for the government to bail you out. That is not a true help or forgiveness. That is a much bigger problem than we have opportunity to deal with here.

To settle credit card debt is not as difficult as some people believe. It does require discipline in order to be effective. There is possibly the need for sacrifice, but in the end a strong personal economy can be yours. Here are some helps for you to begin to get out of debt.

• Stop making debt – There is absolutely no better way to be successful at paying off your debt than by ending your debt cycle. You cannot manage debt through a savings program if you continue in the lifestyle of incurring more debt. Cut up your credit cards, but do not cancel them. If at all possible avoid any further debt.
• Determine the amount of your debt – Make a complete accounting of all you owe. It is amazing how many people do not know how much their complete debt is. Examine which debts should have priority in getting paid off.
• Establish an understanding of your cash flow – Examine where your income goes after each payday. Get a firm understanding of how much money you have for debt payment.
• Stop making minimum credit payments – When you pay minimum credit payments to the credit card companies you are just guaranteeing that you will be in debt for a long, long time – perhaps for the rest of your life. You are just financing the dreams and wishes of the credit card companies long after your principle balance has been repaid. Pay as much as possible toward the retirement of your credit card debt. This will save you thousands of dollars of unnecessary interest charges over the life of your debt.
• Communicate with the credit card company – It may surprise you, but the credit card company only has what is listed on your credit application and your payment history to judge your ability to pay. Communicate with them as to any changes in your employment and/or your budget requirements. They may help you settle your credit card debt in a way you have not thought possible, and could be rewarding for you.
• Educate yourself about how credit works – Financial illiteracy is a leading cause of indebtedness. It is down right hard to make right decisions about anything if you are ignorant of how the system works. Discover how your debt is restraining you from reaching your financial goals. You may be quite surprised at how fast your debt retirement plan will begin through learning about the true dangers debt imposes upon you.

These few tips are just the beginning. There are many other options for you to consider settling credit card debt. Before you make your final decision which step to take, examine the pros and cons of each option to determine just what is the best course for you.