WITH credit card debt approaching $1 trillion according to the Federal Reserve, there is no doubt that thousands and thousands of families who can’t pay their credit card debts are struggling financially. The average family now carries a balance of a little more than $16,000. I see people all the time who owe 2-5 times (sometimes even more) than this amount!
Now this may not seem like a lot, but for families who are living paycheck to paycheck and are barely covering their living expenses, it’s a struggle to carry this much debt.
Getting into credit card debt is fairly easy because the credit card companies make it so. You can even fill out an online application in some cases and get an approval within minutes- without ever talking to anyone!
What happens next is almost predictable. Most people start using their credit cards to pay for things they normally wouldn’t buy with cash and before they know it, they’re maxed out. The minimum payments are no longer affordable because they’re so high. To avoid defaulting, they then keep up with these high credit card payments but because they are still making the same amount of money as when they first started getting into debt, now they can’t pay their rent, mortgage, car payment and sometimes even basic necessities for the household.
Unfortunately, when people get to this point, they are often embarrassed to seek help because they fear being judged by others. They realize they’ve made a big mistake but don’t know where to turn for help. So they suffer in silence hoping that their family and friends will never find out about their financial problems.
I completely understand how this happens and as bankruptcy attorney, I am always sensitive to people’s feelings about their situation because I know that no one ever wants to be in their shoes. It’s an awful feeling when you feel trapped with no way out. This can cause you to lose sleep at night because you are always worried about your debt problems. You may be concerned about losing everything that you have worked so hard for.
If you are in this situation, what I’d like to say to you, however, is that seeking help when you can no longer help yourself is NOT a sign of failure or weakness. Oftentimes I see a lot of situations where someone could have done something sooner before their situation got worse if they had just taken the time to know their legal options. In some cases, bankruptcy may be the only answer but there are situations where it can still be avoided. Don’t deplete your savings and your retirement plan to pay debts if this is only going to be a temporary solution. If doing so doesn’t get you out of debt and you still end up having to file bankruptcy anyway, I suggest you consult with a bankruptcy attorney before tapping into what may be the only retirement savings that you have.
If your credit card accounts have been turned over to collection agencies, there may still be a chance to negotiate a settlement if you are able to. A lot of people dread speaking with bill collectors before they are often rude and they want to put a lot of pressure on people who don’t have the money to pay.
Eventually, you can get sued for not paying and that’s when things get worse. If a creditor obtains a judgment against you, they now have the legal right to garnish your wages, wipe out your bank account or put a judgment lien on your home. Filing bankruptcy will not automatically wipe out a judgment lien once it is recorded against your property although there may be grounds to remove it if you file bankruptcy.
If you are struggling with credit card debt and don’t know what to do, I’d like to offer you a free debt analysis and let you know what I think is the best solution for your situation. For a free office consultation, please call Toll-Free 1-866-477-7772. We have offices in Glendale, Cerritos and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.
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