Are you struggling to pay off your credit card debt? Maybe you’re finding that creditors are demanding more and more from you. It’s tempting to try and bury your head in the sand over mounting debts, but ultimately, there are a few ways in which you can break free from building arrears. Want to write off debt without impacting your credit score?
In this quick guide, I’m going to look at how to write off credit card debt legally and swiftly. Whether it’s consolidating debts, reaching out to debt management services or actually appealing to your creditors, there are no reasons why you should have to juggle huge amounts of money to several people.
Read on for the best ways to pay off your credit cards without having to take on unnecessary stress or hassle. And, of course, without falling foul of the law!
Best Ways to Get Out of Credit Card Debt
The best ways to bring down credit card balances are, perhaps, those where you reach out for support. That said, there are ways in which you can try to bring down your debts on your own. Before you consider anything as drastic as bankruptcy, for example, you might be tempted to look at whether or not you qualify for an IVA, or whether it is worth taking out a zero balance transfer credit card.
There are also ways in which you can have debt written off, though you’re going to need to know how to appeal to card companies and creditors in the right way. Most of the time, they will simply be keen for you to pay off your balance!
It’s worth noting that the best ways to break free from credit card debt revolve around taking a calm, measured approach. Debt is never something that resolves itself through panic and bluster. Take a look through my suggested approaches below, and make sure to consult a professional for debt advice, too, if you’re particularly worried.
Switch to a Zero Percent Balance Transfer Card
The zero balance transfer fees approach is a fantastic way to take care of your debts on your own terms. What’s more, it’s extremely simple and painless to try.
Essentially, this legal way to relieve yourself of debt lets you move existing arrears from one or more cards to another. How does this work? A zero balance credit card will allow you to pay off money from the cards you owe money on without the hefty interest, at least for a limited time.
The main benefits here are the fact that you can break free from interest building up with current creditors, and that you won’t have to juggle multiple creditor demands at once. It’s a simple way of consolidating debt.
However, you will have to be careful with the minimum payments you need to make, as well as the credit limit you receive. The danger with a zero balance transfer card lies in the fact that you may not be approved if you have rising debts elsewhere. If you’re worrying about whether or not this might affect your credit score, make sure to get in touch with a debt advisor in the first instance.
It’s worth looking into how balance transfers work if you’re keen to take the bull by the horns and to wipe off your debt through your own steam. Try out handy loan payment calculator to see what impacts transferring to a 0% balance transfer might have for you.
Talk to Your Lenders Directly
Of course, it might also pay to speak to your lenders and creditors! It may surprise you just how approachable your lenders actually are when it comes to freezing or wiping debt. Providing you have good enough extenuating circumstances, the nicer creditors and lenders out there may be willing to pause action or interest. However, you will need to meet any of the parameters and expectations they set for you – there is likely to be little in the way of flexibility.
Don’t be afraid to reach out to lenders and creditors. If they are willing to listen to millions of IVA proposals, they are likely to be willing to hear you out if you have a clear plan of action to erase your debts with them.
Legally Write Off Your Debts
If you feel as though you’ve explored all other options, there are of course a few legal ways that you can pay off your credit cards through legal channels.
Before you do that, however, why not consider the snowball method of paying off debt? This means that you focus on paying minimum amounts on all your debts, but focusing particularly on paying large amounts off your smaller debts. This way, you can then focus on working your way up to the larger debts.
Or, there is always plenty of worth in reading up on what debt advice books have to say. Many of the world’s biggest earners have found themselves breaking free from debt at one time or another. In fact, I’ve written a guide on the best books to help you break free from debt, too.
Here are a few options through debt advisors which may help you to break down your arrears even further:
DMP – Debt Management Plan
DMPs tend to be good entry-level options for people who have debts to non-essential services, or who may not owe enough critical debt to generally qualify for an IVA. With this option, you work with an authorised and regulated firm to pay a monthly amount towards the debts you owe to creditors. Essentially, you will be funnelling affordable repayments on your credit cars through a middleman who talks to your lenders for you.
DRO – Debt Relief Order
A DRO is slightly different in the sense that you may be able to freeze debt collection and interest on that debt for a set period of 12 months. Providing you owe less than £20,000. If you can get one then creditors cannot chase you for repayment without permission from court. What’s more, if you find yourself in similar low-income circumstances at the end of the 12 months, you will usually be ‘discharged’ from your debts (have them written off). However, this option might not work for you if you have a steady income coming in.
IVA – Individual Voluntary Arrangement
IVA services tend to be a little more formal than the above, but they offer a great solution to breaking free from credit card debt. With an IVA, you and a third party or insolvency practitioner will work with your creditors to propose monthly repayments. This schedule may last up to five years in total, and you and your lenders are bound to a legal agreement. IVAs can affect your credit scoring, however, so be careful if considering this option.
When you apply for bankruptcy, you effectively take the last option available. This option is rarely offered to you unless your debts are extensive enough to be impossible to handle. If you want to know how to write off credit card debt legally without reaching the bankruptcy stage, it is always worth discussing gentler options with insolvency advisors.
Bankruptcy will, of course, erase your debts. However, it will also mean that you are publicly listed as bankrupt, and that you will have a mark on your credit file for up to six years. What’s more, it’s going to make it difficult – maybe impossible – for you to borrow money in the ways you are accustomed to during the period, and you’ll also find there are restrictions when it comes to running companies.
Worried about getting hounded by the likes of Advantis Credit? There are plenty of legal, feasible ways to pay off your credit cards. If you are worrying about how to write off debt, do always reach out to a debt advice charity in the first instance, such as Citizens Advice, National Debtline or StepChange.
Otherwise – why not start reading up on some great ways to relieve yourself of debt and arrears? It’s time to take back control of your finances.
by Jon Craig
I am the creator of Project Financially Free and I started this journey to both educate myself and share my insights on personal finance. I’m passionate about financial literacy and I invite you to join me on this transformative path. See more.