With the proliferation of credit cards in our society, it’s not difficult for credit card debts to get out of hand. Once you’re caught in the credit card debt trap, it’s quite a struggle to get out. Here’s why.
The average household in America today owes about $16,000 in credit cards, according to a recent study. In our society, where having a lot of credit cards has become the norm, we have forgotten the real cost of credit. Did you know that if you simply paid the minimum amount on your credit cards each month, it will probably take you forever to get the entire debt paid off? And if you do the math, you will find out that in the end you probably would have paid 2-3 times the amount of money that you originally borrowed. Most people are shocked (and oftentimes become angry) once they come to the realization that it will take them many, many years before they can get out of debt.
The trouble with credit cards is the exorbitant interest that companies charge on your existing balance. Sometimes, you wonder whether it’s actually legal for a company to charge you 24% in annual interest. And if you continue to charge on your cards (as credit card companies encourage you to), you’re probably biting off more than you can chew if you’re getting deeper into debt each month without increasing your income. This is why a lot of people have found it necessary to work two jobs just to make ends meet each month. One paycheck goes to feed the family, the other paycheck goes to feed the sharks, I mean, the creditors.
Take a sheet of paper, a pen and your calculator. On the sheet of paper, write down your total take-home income (after taxes) at the top of the page and below it, list all the debts that you pay each month. Figure out where your money goes. What percentage of your total net income goes to paying debts? Is it 25%, 50% or more? The higher the percentage, the more serious your situation might be. If the percentage is high, what are you doing about it? Do you have a debt elimination or debt reduction strategy that can get you out of this unpleasant situation?
If you are overwhelmed with credit card debts and would like to look into the possibility of a Chapter 13 debt consolidation, my office provides a free personal consultation. If you have regular income from any source (pension, retirement income or even family contributions are acceptable), you may qualify to file for Chapter 13 and pay only a fraction of the total amount owed. And at 0% interest, you can usually get out of debt in as short as 3 years. It doesn’t matter how much you are paying now each month. In Chapter 13, you may qualify to reduce that amount by 50% or more. Of course, every case is different and requires the evaluation of a competent bankruptcy attorney. If a payment plan is not possible because of a shortage or lack of income, you may also consider filing for Chapter 7 to wipe out your debts.
To schedule a free personal consultation, please call Toll Free 1-866-477-7772. It may be possible to negotiate settlements with your creditors without filing bankruptcy. If bankruptcy is the only option, let us carefully review your situation and find out whether Chapter 13 or Chapter 7 is advisable. We have offices in Glendale, Cerritos, West Covina, Valencia and Riverside.
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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.