Qualify For a Credit Card Debt Relief Bailout
In response to this country’s economic crisis, the federal government engaged in a number of far reaching efforts to rescue some of the largest Wall Street firms. However, many asked “What about Main Street?” What could be done to rescue the millions of Americans who had been hit by unemployment and downsizing and were now deeply entrenched in unsecured credit card debt?
Who Qualifies for Credit Card Debt Relief?
If you have high credit card balances and are facing a hardship condition which makes it difficult for you to pay, you may be eligible for a settlement plan for debt relief through your credit card issuer or bank. The amount you owe must be significant, usually in the range of $7,500 - $10,000.
Under this plan, up to 50% or more of your credit card balance may be cancelled or forgiven. Banks will not automatically extend these terms to you. You have to apply for a special program known by various names such as “hardship program” or “balance liquidation program”; however, you do not need good credit to be accepted.
Bank Debt Relief Bailout Programs
Unlike debt consolidation or debt settlement companies, banks and credit card issuers charge no fee for customers to enroll in their debt relief programs. To be eligible you must be behind in your payments or have a poor payment record . Once enrolled, you must pay on time or be removed from the program. Once you are removed you will be subject to higher interest rates, larger payments and increased collection activity.
Benefits of a Debt Relief Program
• Reduce debts by up to 50% or more
Drawbacks of a Debt Relief Program
Payments must be made on time or you will be removed from the program.
The Internal Revenue Service may consider any amount of forgiven debt to be taxable income. For example, you owe $25,000 but agree to a settlement amount of $10,000. You now owe $10,000 but you must claim the extra $15,000 as income on your tax return.
Additional HelpThe Federal Trade Commission offers free advice on debt management to individuals at their website www.ftc.gov.
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