Credit cards are often easy to obtain, and can be more convenient than other payment methods, at least at the time. While this piece of plastic might offer numerous benefits, a downside exists that many individuals have been unfortunate enough to discover. Perhaps you signed up for a card with the intention of using it for emergencies, yet found yourself using it much more often than planned.
Sometimes all it takes is one missed payment and your interest rate could skyrocket, potentially causing your minimum payment to be insufficient to cover accrued interest. If credit card debt is causing you to suffer a lesser quality of life, and you are unable to see a light at the end of the tunnel, you could be considering personal bankruptcy.
Important considerations regarding bankruptcy
Two types of personal bankruptcy are generally the most common filed by consumers -- Chapter 7 and Chapter 13. Which chapter you file for could depend on your ability to repay certain debts, even if only partially. When exploring a long-term solution such as bankruptcy, certain aspects require consideration that may impact your decision, such as:
- Qualification: Your financial standing will affect the type of bankruptcy you can file. For Chapter 7, you will have to qualify by showing an inability to repay debts due to insufficient remaining income after monthly expenses. For Chapter 13, you must have a regular income that allows you to set forth a reasonable plan for repaying certain debts over a given period.
- Assets and debts: Although both chapters could completely discharge credit card debts, each chapter also differs concerning the impact on assets and other debts, and obtaining advice from an attorney is advisable.
- Financial obligations: In Chapter 13, you could include the cost of filing in the repayment plan, but Chapter 7 must be paid up front.
- Impact on credit: A bankruptcy will appear on your credit for a set period depending on the type. However, if you are unable to make payments on debts, the impact on your credit could be worse in the long run than filing for bankruptcy.
There are alternatives to bankruptcy, such as debt consolidation or settlement, but in some cases, a more permanent and effective solution might be necessary.
Assistance moving forward
Extensive credit card bills can place you in an overwhelming financial bind that is challenging to overcome. Perhaps you have weighed your options, and you wish to move forward with bankruptcy. The process can be complex, potentially prompting a need to seek guidance from someone with knowledge of federal and Pennsylvania state bankruptcy laws.
You could speak with an attorney for advice on available options for relief. An attorney can address your financial issues and needs, advise you of the potential outcomes of each option and assist you throughout the process of filing for bankruptcy, which may prove invaluable to securing a healthier financial future.