Credit card debt plagues many Americans. When you consider that there are over 600 million credit cards in circulation in the United States accounting for over $800 billion in debt, and about a quarter of Americans regularly fail to pay all their bills on time, you can see scale of the problem. The average household owed almost $16,000 in credit card debt in 2011, and dedicated about 21 percent of its income to servicing that debt.
It’s not just the actual charges you have to worry about either. Credit cards have high interest rates and assess plenty of fees. Many people don’t even know what the APR on their credit cards is, so they don’t realize how quickly their debts will multiply until it is far too late.
Eliminating Credit Card Debts with Chapter 7 Bankruptcy
Fortunately, if you find yourself drowning in credit card debt, a bankruptcy attorney Moreno Valley CA can offer some help. The first thing your attorney might suggest is filing Chapter 7 bankruptcy. This will allow you to completely discharge your credit card debts. The downside is that in doing so, you will trash your credit for the next 7 to 10 years, which is the amount of time a bankruptcy will stay on your credit report. However, by the time your credit card debts are so huge that you’re considering bankruptcy, your credit score is probably already in the toilet.
Eliminating Interest and Lowering your Balance with Chapter 13 Bankruptcy
Your bankruptcy attorney Moreno Valley CA might also suggest filing Chapter 13 bankruptcy. This might be a good option if you think you would be able to repay your debts if they stopped ballooning due to interest. If you promise to repay 100 percent of your debts, interest will stop accumulating. If you can’t afford to pay 100 percent, your attorney can help you negotiate for a lower amount, but you won’t escape interest.
Another thing to consider before filing for bankruptcy in order to escape credit card debt is what will happen to your assets. Some types of assets may need to be liquidated as part of the proceedings. However, there are always exemptions. Your bankruptcy attorney Moreno Valley CA will be able to advise you as to what exactly you would need to do in order to qualify for various exemptions. They can also provide you with an overall recommendation as to whether or not you should pursue bankruptcy as a way to eliminate credit card debt.
