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Handling Credit Card Bills You Can't Pay
As we leave behind the age of affordable and ready credit that we lived through during the economic boom of the last ten years, millions of people are waking up to the fact that their credit card balances are too high to be sustained for long. Even if your financial position hasn't been affected by the recession, many card issuers have been pushing up their APRs in contrast to the near-zero base rates designated by the central banks. The outcome is that servicing the monthly repayments is getting ever more trying.
And of course, many people have found their incomes dropping during the worldwide recession, and so millions of us now face the dilemna of not being able to pay our credit card repayments and getting into arrears. What is the result of this?
The first thing to do is to get things into perspective. Although a serious matter, credit card debts are not secured and so your creditors can't force you to give up your home to clear the debt, neither can they have it appropriated from you.
Likewise, you can't be arrested or imprisoned for failing to meet your commitments. You can of course be taken to court, ...
... but this willl be in a civil court rather than a criminal one.'
In reality, most banks would rather not take legal action as it is expensive, not particularly successful in recovering the debt, and poor publicity. Because of this, banks are usually happy to negotiate a reduced monthly payment that you will be able to manage more comfortably. You may also request that interest fees to be suspended so that you can get back on top of your debts, but this is less likely to succeed.
The prospect of phoning your creditors and asking for help can be intimidating, but there is plenty of help available from debt charities who can counsel you on the best course of action, and may even take your case on and negotiate on your behalf.
So, should you find yourself unable to pay your credit card bills, don't ignore the situation: take some positive action and take advantage of the help that's on offer.
About the author: Martin writes for Debt Nation, where you can read more information about handling credit card arrears at http://www.debtnation.co.uk/credit-card-arrears.html along with other articles on money problems.
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