Many Americans are back to high credit card spending. According to a September 2021 WalletHub study, Texas ranks number two behind California, with the highest credit card debt increase during the Pandemic. This increase is partially due to the increased cost of living caused by inflation and transportation issues impacting the flow of goods. While some Texas residents have a plan in place to pay down this extra debt, some have found themselves struggling to make minimum payments. Worse, some have fallen behind and face aggressive debt collections.
Texas-based Debt Redemption Texas Debt Relief explains options to deal with overwhelming credit card debt.
Debt Consolidation Loans:
If you have excellent credit and a good debt-to-income ratio, consider a debt consolidation loan to pay off high-interest credit card debt. It is recommended to start with your local bank or credit union where you deposit your income since the institution should be the most familiar with your situation. However, if you do not have high credit scores, this may not be an option. Lenders want to minimize their risk when agreeing to a large unsecured loan. Depending on the requirements of your institution, it may be a condition of the new loan to pay off the credit card debt balances. Regardless if this is required, it is important to change your spending habits, so you don’t find yourself in a situation with more debt than you can afford to pay back.
Home Equity Loans:
While this was impossible for many homeowners just a year or two ago, recent home price increases have unlocked available equity in many Texas homes. Texas law only permits homeowners to pull out equity up to 80% of the value of the home. Before the recent price increases, most homeowners who purchased their homes in the last few years did not have any equity that could be utilized. But with many Texas home prices currently 20% or higher than they were just two years ago, there is now equity that can be used to pay off high-interest debt.
Like unsecured debt consolidation loans, it is important not to continue spending habits that accumulated the credit card debt. Also, consider that transferring unsecured debt to your home can put your home at additional risk of foreclosure if you cannot pay the mortgage at some point. Credit card debt is unsecured, so unlike a mortgage, there is no collateral to foreclose or repossess.
Credit Counseling Debt Management:
If you cannot qualify for a debt consolidation loan, these programs can reduce interest rates with your existing credit cards and select personal loans without the need to obtain any new debt. You will also have the convenience of making just one payment per month. It is essential to understand this is a hardship program, so you will not be able to continue to charge on your cards, and it may impact your credit scores while in the program. However, if you are utilizing a hardship program, likely, you cannot afford to take on additional debt in the first place.
Debt Relief with Debt Settlement:
If you are about to fall behind with your debt or have already fallen behind, this program may be able to save you the most money and resolve your debt in the shortest time without bankruptcy. Rather than just lowering your interest rates, debts are negotiated and settled for less than the balances owed. Unlike credit counseling, payments are not made every month to your creditors. Instead, money accumulates into a special purpose account, and debts are negotiated and settled one at a time in a program that is usually estimated somewhere between 24 to 48 months. Depending on your budget and estimated program length, your monthly cost can often be less than half compared to making minimum credit card payments. If you have been making monthly payments and have a good credit score, not making monthly payments will negatively affect your credit scores. However, your debt-to-income is likely impacting your financial position severely, even if you have good credit scores. Once your debt is resolved, you can quickly begin rebuilding your credit scores. You may even have much more borrowing power once the debt-to-income ratio is improved by resolving the debt. Debt Redemption Texas Debt Relief can also help Texans who have been sued by a creditor or collection agency.
For some in severe financial stress, bankruptcy may be the only way out. But some people who file have non-exempt assets, or their income exceeds the chapter 7 threshold, so they may not be able to discharge their debt in chapter 7. In those cases, a chapter 13 repayment plan may be the only option. Chapter 13 could be more expensive than debt negotiation in some cases and less expensive than others. If you are considering bankruptcy, you need to seek the advice
of a Texas bankruptcy attorney. Debt Redemption Texas Debt Relief cannot provide legal advice but can refer you to a very experienced Texas bankruptcy law firm for a free consultation.
Debt Redemption Texas Debt Relief is a Texas-based company exclusively serving Texans. Our Texas Debt Specialists have the resources to assist you in shopping for a debt consolidation loan with many lenders who provide loans to Texas, credit counseling, debt negotiation, and referrals to Texas bankruptcy attorneys. Our company is 100% veteran-owned, state-licensed, and has been assisting Texans for nearly two decades. Also, our debt negotiation fees are typically 20 to 40 percent LESS compared to out-of-state companies. Check out our high rating with the Better Business Bureau and speak to one of our Texas Debt Specialists by calling 800-971-4060 or visit https://debtredemption.com . Phone and office consultations are free with no obligation.
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