Eliminate Bad Credit Card Debt Legally

April 11, 2010 - PRLog -- Bad credit card debt sucking you dry? You can eliminate bad card debt legally and completely.

Many people think that you have to declare bankruptcy to eliminate card debt. To eliminate it completely and immediately, bankruptcy is certainly the easiest solution.

By negotiating debt, you can also eliminate the debt. You can opt to pay it off at pennies on the dollar or you can wait and see what happens with the collection process.

Credit companies are lenders. Many of them are divisions of the "big banks". The accounting rules and federal law require that they write off the balance of any credit card debts which are unsecured loans when those debts have become more than six months past due. So if you have stopped paying your payments, six months from the last payment that you made, the balance will have to be written off or "charged off".

Written off does not mean that you do not owe the balance anymore. It simply means that the debt is worthless as an asset on the books of the card company. In order to recover that asset, the company will either sell the debt, again at pennies on the dollar, or attempt to collect a debt from you.

For most people, who find themselves in this situation, collection will not yield much recovery. Normally the homestead is exempt and no states have exemption laws for much of your personal possessions. Even if using the federal bankruptcy exemptions, many people are judgment proof. Most retirement plans, insurance policies, and other long-term investments for retirement are exempt from such collection efforts.

In practice, even when suit is brought on credit card debt, the debt has been sold a number of times and the record-keeping is so bad that many debts cannot be collected. Make sure that you contact an attorney that is experienced in defending debt collection if you are sued.

James Montgomery teaches about credit card debt and credit repair techniques. Get free information about credit card debt as well as a do it yourself package. Learn how you can repair your credit rating at improve credit score .

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About James Montgomery: Named a Texas Superlawyer, James Montgomery writes extensively on credit card debt settlement and helping individuals free themselves of the chronic stress from financial predicaments. He also buys and sells businesses.