With these hikes in the credit card interest rates and a crushed economy what are we to do?

Is bankruptcy an option?

There are options to do debt settlement but what about my credit will it still be damaged?

One way or another it's got to be taken off and this article will break down the debt settlement process to explain EXACTLY how the program works

How do Credit Card companies make their money?

First of all, credit cards are designed to give a small loan and make a profit for the creditors. The creditors borrow their money from the Federal Reserve for 0 interest. They will then sell that money to the public by charging 20 interest, which in turn is a huge profit.

They make it worthwhile by offering 0.

Chapter 7 is obviously a more glamorous option because even though you are going to destroy your credit in the 10 years to follow, you will be removing all of your unsecured debt.

The only problem is that almost nobody is getting approved for it because it would bankrupt the credit card companies. The alternative is chapter 13 which destroys your credit also and you are still responsible for 70 of your total unsecured debt and usually takes about 2 years to do so. Once it is cleared you are back at a middle ground with your credit rating so if you plan it out properly, you will have a good credit rating within a couple months after all your debt is settled.

Once you start working with a debt settlement company, they will open a trust account for you that you will pay a monthly amount towards and it's usually about half of what your current minimum payment is.

As soon as you have enough money in the trust account to start settling your debts, the debt settlement company will start negotiating with your creditors usually starting with the smaller amounts first. Once they agree upon a certain settled amount (usually 50-80% lower) they will send the payment for that amount to close the account for good.

Can I do this on my own?

Yes you can absolutely do this on your own, the only problem with this is that if you don't have the full amount to settle with them up front, they will not accept any offers.

Secondly if you decide to start saving for a settlement amount and then paying it off on your own, you will not be protected against legal threats the creditor can place against you in the meantime (judgments, wage garnishments, lawsuits, etc.).

Pros:

your debt will be eliminated for good

your total debt owed will be half or better of the original owed amount

you will be protected against legal threats if you go with a law firm

it only takes about a year to 3 years to be out of debt

Cons:

the creditors will harass you for a payment that's due

the creditors will post missed payments on your credit report until it is settled

Conclusion:

The bottom line is that credit card debt is no fun and with the creditors hiking interest rates, they are creating an unfair advantage for themselves. The only way to get out of debt is to pay it off but there are programs to help you pay off a lower amount of it without a decade of damage to your credit.