Credit Card Debt
If you have credit card debt you are not alone. The average American adult is carrying a credit card balance of over $6,000. It is easy to get into credit card debt in our culture. Unexpected things happen in our lives. We have bills to pay and sometimes we turn to credit cards to help make ends meet.
If you are only making your minimum monthly payments on your credit card debt, it may take a very long time to pay them off. Let’s say you owe $20,000. If your credit cards charge an average interest rate of 30% (which unfortunately is not all that unusual) you are probably making a minimum payment in the vicinity of $700 each month, a huge additional expense for most people.
If you continue to pay your debt off at this rate with no additional spending on the cards you will pay off your credit card debt in approximately 36 years. Do you picture yourself retired in 36 years or having to work full time because you are still paying on bills you acquired when you were much younger?
There are several ways to pay off credit card debt. Finding a better paying job may be an option. Or even going back to school to start a new career. Selling off some of your belongings, if you have anything of value, can be helpful. And there's the solution that many of us could use a little more of: tightening up our spending.
When one or more of those soutions won't cut it, it may be time to consider bankruptcy. Usually, all credit card debts are forgiven during bankruptcy. If you qualify for Chapter 7 relief, all of your credit card debts will be wiped away in about 3-4 months. If you don't qualify for Chapter 7 relief, a Chapter 13 bankruptcy can also be a solution because it does not require that you pay off all of your credit card debt. In most cases, our Chapter 13 clients end up paying back only a small portion of what they owe on their credit cards.