Bankruptcy and Credit Card Debt

Are you buried in debt due to credit card usage? If so, you’re not alone! Americans have accrued nearly $1.3 trillion in credit card debt and are paying interest rates around 21 percent. With rates like that, making minimum payments each month barely touches the balance owed, leaving borrowers feeling overwhelmed and powerless. At that point, many borrowers find themselves considering filing for bankruptcy. It could be the solution you’ve been looking for,

Considerations in Bankruptcy 

How can you know if bankruptcy is the right move for you? Consider the following questions in order to make a decision that works for you:

• Do you owe more than you bring in? If you’re in debt to the tune of tens of thousands of dollars to various creditors, is there really a way to pay off your debt, or will you simply watch the balance owed grow each month due to interest accruals?
• Are you feeling like you can’t escape the endless harassment of bill collectors? Are there lawsuits or wage garnishments that haunt you?
• Have you experienced a hardship–such as a physical injury or illness–that will be a long-term or permanent issue–or are you suffering only a temporary setback like a job loss?

Options in Bankruptcy

If you are trapped in a financial situation and you simply can’t see your way out of it, there are a couple of options worth considering when it comes to bankruptcy:

• Chapter 7 is the option that can put debt behind you the most quickly–usually within just months. In order to qualify, you must pass a means test that shows your income is below the state median or you meet other criteria demonstrating that you cannot pay off your debt. You will also have to part with the lion’s share of your possessions, which will be sold off in order to make partial restitution to creditors.
• Chapter 13 is more of a repayment plan that involves restructuring your payments so that you can repay what you owe within five years or less.

The Downside of Bankruptcy 

While the pressure from creditors, including from lawsuits and wage garnishments, will disappear when you file for bankruptcy, there are costs worth considering:

• You may have to part with cars or other cherished possessions, depending on the type of bankruptcy and the circumstances of your case.
• Your bankruptcy will be indicated on your credit report for years to come.

Is Bankruptcy for You? 

Everyone’s circumstances differ, so it’s important for you to discuss your situation with an experienced bankruptcy attorney in order to determine the best course of action for you. At The Law Office of Julia Kefalinos, our dedicated and knowledgeable Miami bankruptcy attorneys can guide you through the process of bankruptcy and make sure there are no surprises. To discuss, schedule a confidential consultation in our Miami office today.

Source:

cbsnews.com/news/should-i-file-for-bankruptcy-for-credit-card-debt/