Stop Paying

• The simplest solution for defaulting, at least in the beginning, is to simply stop paying your credit cards. Within six months, this will lead to a distinct chain of events: higher interest rates, late fees, creditor calls, having your account written off and finally court proceedings that could lead to garnishment or liens. You will not go to jail in the United States for nonpayment of debt. However, your credit score will take a beating. Depending on the state where debt was incurred, creditors can follow you for 10 years or more after the initial debt default if you do not take any other action.
  
  

Negotiation With the Credit Company

• You may be able to negotiate a partial payment with your credit card company, especially if your payment is late and you can offer a lump sum to settle the debt in full. While there is no guarantee for how much you can settle for, some credit card companies have settled for as little as half what you owe including fees and interest. This arrangement will be reported to credit bureaus, but is not as devastating as simply ignoring your bills, and can quickly be overcome by good payment history after the settlement,
  
  

Debt Consolidation and Debt Negotiators

• Numerous for-profit and not-for-profit debt consolidation and negotiation companies offer services to reduce the amount you owe a credit card company. These companies work as a go-between, guiding you through appropriate steps to reduce your debt while ensuring the credit card companies get some money. However, thoroughly investigate any debt consolidation or negotiation company you use. Credit card companies do not like them, and many are little more than scam outfits, including the supposed not-for-profits. To avoid this problem, look for negotiators in the members of the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.
  
  

Bankruptcy

• Bankruptcy does not default your credit card; instead, it discharges your debt through court action. Chapter 13 bankruptcy allows you restructure debt. Chapter 7 bankruptcy eliminates your debt. Each has different eligibility requirements. In general, Chapter 13 allows you to keep more possessions, while Chapter 7 relieves you of all bankrupted debt and, oddly, makes it a bit easier to get credit afterward (though at much higher interest rates). If properly implemented, either type of bankruptcy can bring much-needed relief to your debt situation, though your credit score will suffer as a result.