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How long does it take to settle your credit card debt?
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With the average credit card interest rate sitting at an unprecedented 23%, many credit card users have found themselves facing serious financial challenges. For example, about 20% of cardholders are maxed out currently and the number of delinquent credit card accounts is rising, according to recent reports. But today’s high interest rates are just one part of the issue. The way credit card interest is calculated also helps transform what could be a manageable balance into a daunting financial burden.
Unlike simple interest, which is calculated only on the principal amount, credit card interest compounds — meaning it’s calculated (typically daily) on both the principal and the accumulated interest from previous periods. This can cause credit card debt to grow exponentially, making it increasingly difficult to keep up with the payments.
As a result, many cardholders are looking for alternative ways to manage their debt, like debt forgiveness (or debt settlement). With credit card debt settlement, the goal is to negotiate with creditors to pay less than the full amount owed. The remainder of what is owed is then forgiven, which can provide serious relief to those who are struggling with their card debt. Before you take this route, though, it’s important to understand the timeline involved and the factors that influence it.
Explore your credit card debt relief options and consult with an expert online now.
How long does it take to settle your credit card debt?
While you can try to settle your credit card debt on your own, many cardholders opt to enroll in a credit card debt forgiveness program through a debt relief company instead. While there are fees for this service, working with experts on your debt settlement can maximize the chances of a positive outcome, as their experience with settlement negotiations comes in handy during the process. So, in many cases, it could pay off to do so.
The timeline for settling your credit card debt with the help of a debt relief program can vary significantly depending on a range of factors. On average, though, it typically takes between 24 to 48 months to complete this type of program. That time frame represents the period from when you enroll in a debt settlement program to when all enrolled debts are settled and paid off.
It’s important to note that this is just an average, and each experience can differ greatly. Some cardholders may see their first debt settled in as little as four to six months after enrollment, while others might not see results for a year or more. The entire process of settling all debts usually takes at least 24 months, though, with many programs designed to last 36 to 48 months.
During this time, you will typically stop making payments to your creditors and instead make monthly payments to the debt relief company, which deposits the money into a dedicated account. These funds accumulate over time and are used to negotiate lump-sum settlements with creditors. The negotiation process itself can take several months for each debt, as debt relief companies work to secure the best possible settlements.
Find out how the right debt relief program could help you get out of debt now.
What factors impact the debt settlement timeline?
There are several key factors that can influence how long it takes to settle credit card debt, including:
- Total debt amount: Generally, the more debt you have, the longer it will take to settle, as larger debts require more time to accumulate sufficient funds for settlement offers.
- Number of creditors: Having debts with multiple creditors can extend the timeline, as each creditor needs to be negotiated with separately.
- Creditor willingness to negotiate: Some creditors are more open to settlement offers than others. A creditor’s willingness can significantly impact how quickly a debt can be settled (if at all).
- Ability to save: The rate at which you can contribute to your settlement fund affects the timeline. Those able to set aside larger monthly amounts may settle their debts more quickly.
- Debt age: Older debts are often easier to settle, as creditors may be more willing to accept a reduced payment on long-standing debts.
- Legal actions: If a creditor pursues legal action, it can complicate and potentially extend the settlement process.
- Economic conditions: Broader economic factors can influence creditors’ willingness to settle — and the terms they’re willing to accept.
- Debt settlement company’s expertise: The experience and negotiation skills of the debt settlement company can affect how quickly and effectively debts are settled.
The bottom line
While credit card debt forgiveness or debt settlement can provide serious relief in certain situations, it’s important to maintain realistic expectations. Settling credit card debt is rarely a quick fix, and even accelerated timelines typically involve months or years of commitment. Your creditors aren’t required to settle your debts, either.
Still, the potential for significant debt reduction can mean the wait and the extra work is worthwhile, especially if you’re struggling with overwhelming credit card debt. As with any major financial decision, though, it’s crucial to thoroughly research and understand the process and consider all of your available options before committing to a debt settlement program.
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Police arrested a man on murder charges this month, 14 years after he allegedly killed a man in Virginia, but the victim’s body has never been found.
Shane Ryan Donahue, a Virginia man, is presumed deceased, the Prince William County Police Department said Tuesday. He was last seen leaving his parents’ home in Nokesville, Virginia, on March 22, 2010. Donahue, 23, was headed to his house in Nokesville, but never made it there.
Donahue was added to the National Missing and Unidentified Persons System after he vanished. According to records, Donahue did not have a car and regularly got rides from friends. He frequented Washington, D.C., Baltimore, Fauquier County, Virginia, and Northern Virginia.
The case stumped investigators, who followed a number of leads over the years. This spring, detectives reactivated the investigation and started looking at every detail of the case from scratch, officials said. They revisited people who had been interviewed during the initial investigation and reviewed “digital evidence in greater detail due to advances in analytical technology and modern police investigative practices,” according to a news release.
Officers said Donahue was last seen leaving his parents’ home with Timothy Sean Hickerson, now a 43-year-old Florida resident. Investigators connected Hickerson to a burglary at Donahue’s home that happened just days before the Virginia man disappeared.
Detectives got an arrest warrant this month and, with the help of Florida’s Flagler County Sheriff’s Office, Hickerson was taken into custody in Palm Coast, Florida. Hickerson was charged with murder and burglary, is now set to be extradited to Virginia.
Former President Donald Trump, an avowed proponent of tax cuts, is floating the idea of reversing a measure passed during his tenure in the White House that effectively raised taxes for many U.S. homeowners.
In a post Tuesday on Truth Social, Trump suggested he would scrap a $10,000 cap on deducting state and local taxes (SALT) that was passed as part of the 2017 Tax Cuts and Jobs Act — a massive revamp that he has said boosted economic growth.
Now, in the run-up to the November election, Trump said in the post he would “get SALT back, lower your taxes, and so much more,” although he stopped short of offering details. Trump made the post ahead of a speech he’s giving Wednesday at the Nassau Coliseum on Long Island.
Trump’s new proposal for getting rid of his $10,000 SALT deduction cap comes as the presidential hopeful is pitching several additional tax cuts that would, if enacted, reduce taxes for major groups of voters. He’s also vowed to eliminate taxes on Social Security benefits, a pledge that could get support from the nation’s senior citizens, as well as to end income taxes on tipped workers and on overtime pay, ideas that would help lower- and middle-income Americans.
Yet Trump’s reversal on the SALT deduction has sparked skepticism from lawmakers as well as economists and policy experts.
“So … now Trump is against the SALT tax cap which *checks notes* is a key part of the — only — major piece of legislation passed during his administration?” noted Chris Koski, a political science professor at Reed College in Portland, Oregon, on X.
Rep. Tom Suozzi, a Democrat from Nassau, Queens, said in a statement on Wednesday that he is “happy that the former president is saying that he has finally reversed his devastating decision in 2017 to cap the State and Local Tax (SALT) deduction.” He also urged Trump to convince Republican lawmakers to vote to restore the full deduction “if he is truly serious.”
The SALT deduction cap “has been a body blow to my constituents for the past 7 years,” Suozzi added.
Senator Chuck Schumer, a Democrat from New York, wrote on X,”Donald Trump took away your SALT dedications and hurt so many Long Island families. Now, he’s coming to Long Island to pretend he supports SALT. It won’t work.”
Asked for details about Trump’s proposal to restore the SALT writeoff, a spokeswoman for the Trump campaign told CBS MoneyWatch: “While his pro-growth, pro-energy policies will make life affordable again, President Trump is also going to quickly move tax relief for working people and seniors.”
Here’s what to know about the SALT deduction.
What is the SALT deduction?
The state and local tax deduction allows taxpayers who itemize to deduct property taxes, sales taxes and state or local income taxes from their federal income taxes. Prior to the Tax Cuts and Jobs Act, there was no limit on how much people could deduct through the SALT deduction.
But the 2017 tax overhaul passed under Trump limited the deduction to $10,000 – a blow to many homeowners in states with high property taxes, many of which are Democratic leaning. At the time of the law’s passage, the Treasury Department estimated that almost 11 million taxpayers in high-tax states like New York and New Jersey would forfeit $323 billion in deductions.
Who benefits from the SALT deduction?
Homeowners with high property taxes, such as people in New York, New Jersey and California, were the biggest beneficiaries of the the full SALT deduction.
But some experts also noted that the SALT deduction primarily put more money in the pockets of higher-earning Americans. About 80% of the full SALT deduction had helped people earning more than $100,000 a year, according to the Tax Foundation.
What happened after Trump capped the SALT deduction at $10,000?
The limit has increasingly impacted middle-class homeowners across the U.S. because of rising property taxes and incomes. Some lawmakers have also sought to either repeal or increase the SALT cap, but none of those efforts have borne fruit.
Earlier this year, some lawmakers sought to double the SALT deduction cap to $20,000 for married couples, with the change retroactive for the 2023 tax year. But that bill was blocked in the House in February.
Won’t the SALT deduction cap expire anyway?
Yes, the SALT deduction cap is a provision that’s due to expire in 2025, as are many other parts of the Tax Cuts and Jobs Act, such as a reduction of the individual tax brackets. But Trump has previously indicated he wants to extend the provisions in his signature tax law.
How much would it cost the U.S. to repeal the SALT deduction cap?
It won’t be cheap, according to the the Committee for a Responsible Federal Budget, a think tank that focuses on budget and policy issues.
Eliminating the $10,000 deduction limit “would increase the cost of extending the 2017 Tax Cuts and Jobs Act (TCJA) by $1.2 trillion over a decade,” the group estimates, adding that such a measure would be a “costly mistake.”
Extending the TCJA’s tax cuts would increase the nation’s deficit by $3.9 trillion over the next decade, the group estimates. By adding in a expiration or repeal of the SALT deduction cap, that would grow to $5.1 trillion, it added.
“Lawmakers should not extend the TCJA without a plan to – at a minimum – offset the costs of extension, but ideally the plan would raise revenues relative to current law and help put the nation’s debt on a better trajectory,” the group said in a statement.
