Managing credit card debt can be one of the most difficult things to do. Even if you stop using your card but don’t pay off what you owe on it, interest will keep being added every month. It can seem like this kind of debt will simply keep growing no matter what you do -- but there is a way of clearing credit card and loan debt that may work for you. So, how does it work?
What is credit card/loan debt clearance?
Recent changes to the Consumer Credit Card Act of 1974 have opened up a route for some people to clear their credit card/loan debts in a perfectly legal manner. If you qualify under these changes then your credit card and loan debts could be significantly reduced or even written off completely. In general terms this will apply to agreements taken out before the 6th April 2007 where the agreement no longer complies with the changes in the Consumer Credit Act. Let’s see how the process works:
- You approach a credit card/loan clearance specialist with the aim of assessing whether you have a case.
- If your specialist thinks you do have a case then they will approach your creditor to discuss your situation. Your creditor may come to an agreement at this point or may not.
- If they will not address your case and it warrants further action being taken then your specialist debt manager may recommend you go to court to get a legal decision.
There are various benefits to taking this route. These include:
- If your credit card or loan supplier issued an agreement before 6th April 2007 that does not comply with recent regulatory changes then you could well see part or all of your debts eradicated here.
- The costs of this process will vary. But, most reputable firms will charge you based on results and if this route does not work for you then the chances are you will only have a small administration fee to pay.
- You can also reclaim the cost of mis-sold related products such as payment protection cover and so on.
- If you took out a loan via a broker then you may also be able to get back any commission that he/she was paid.
- This kind of action will not show any adverse results on your credit history.
Are there any drawbacks to using credit card/loan clearance?
This is a legal way of writing off debts without taking a damaging debt management route. There are some issues that you may want to think about here, including:
- There is no guarantee that you will qualify for debt reduction/repayments.
- You will have to pay something for this kind of service unless you do it yourself.
- Doing this yourself can be a difficult and intimidating process if you do not know exactly what you are doing.
- You may need to go to court if your lender(s) will not come to an agreement with you.
- You should not carry on using any credit cards involved in this kind of solution.
To qualify for this kind of debt management solution you will need to have taken out a loan or credit card before 6th April 2007. Apart from that qualifying point it is hard to say whether you would qualify for help here as each individual’s circumstances are different.
For this reason it is recommended that you take professional advice here before you decide the best route to take to eradicate your credit card or loan debts. For a free no-obligation chat with a professional money counsellor, telephone 0800 970 4835, or complete the details on our contact us page. We can help you work out the best way of getting out of the red and back into the black!
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