According to an informal research, an average American family uses at least 5 credit cards at the same time. During global economy crisis, many cardholders who have accumulated a large sum of outstanding balances are suffering from financial hardship and they can’t find their way out. In order to assist these people, the US Federal Government has specially offered an economic stimulus package to reduce the citizens’ financial burden in 2009. At the same time, the US Federal Reserve has also enforced the new credit card rules to assist the debtors to eliminate their debts in an easier manner. All the efforts taken by the government is to provide debt relief to the debtors. The debtors are still required to pay back partial of their debts based on their financial ability.
Recently, many people are talking about Obama’s Credit Card Debt Forgiveness Act 2010. Everyone who is knee deep in debt is expecting to erase his or her debts completely by applying this act. In actual fact, there is no such “privilege”. Many people are confused and they misunderstand this act. They are trapped by the terms used. Debt can’t be forgiven completely. If we use our common sense, we know that it is impossible for the government to assist the debtors to wipe out all the outstanding balances caused by their uncontrolled spending habits. The government fund should not be spent this way. On the other hand, if you were the creditor, do you agree to accept the deal? It is indeed unfair for the creditors to write off all the debts without getting back the payment at all. Hence, if any of the debt relief companies makes use of this specific act as their selling point, it is 100% scam.
In general, creditors will never write off the debtors’ outstanding balances automatically even though the debt amount is very little. In order to become debt free, the debtors are required to put in effort to negotiate with their creditors to reduce their debts. If the debt amount is very small, say about few hundred dollars, the debtors can write in settlement letter to request the creditors to write off their debts. However, if the debt amount is big, the debtors are advised to bargain with the creditors to cut down the total debt amount by 40% to 50%. In the worst scenario where the debtors can’t afford to pay back any single cent, they have no choice but to declare bankruptcy.
To sum up, there is no short cut for you to “delete” your credit card debt immediately.