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What can I do if I am starting to get overwhelmed by my credit card debt?

Posted on October 2, 2014 at 1:25 AM

     If you are an American living in the 21st Century, you have probably had a moment when you are struck by just how much of your disposable income is devoted to paying on your monthly debt bills. Like so many others, you may have recently confronted the fact that paying the monthly minimum due on your high interest credit card bills is getting you nowhere fast.

 

     The greatest problems with credit cards are their easy access and universally high interest rates. When you see something you want, it can be far too easy to open your wallet and charge it. Or you may be in a short term bind of being out of cash and an expense needs to be paid, and paying it on a credit card is the only option you have other than not paying at all. Either way, you have just had the hole you are in dug even deeper.

 

     There are several ways that any “expert” can tell you to deal with your credit card debt. You can make a household budget and earmark every dollar coming in for a particular purpose. You can pay down your debts by tackling the credit card with the highest interest rate first and work your way through progressively over many years. You can even try and smartly borrow money from a low interest source such as a retirement loan on your 401(k). The problem is however that sometimes there is just no way that you can truly get a grasp on a sizable credit card problem. This is especially true when you have a stagnant or declining income and daily living expenses are rising, a problem facing us all as a Nation right now.

 

     If, given your income, you have reached the point that there is just no real way for you to solve your credit card predicament you can first try to settle the debt with the credit card companies. This is often easier said than done however, because most any settlement that the credit card companies will agree to will involve a large up front payoff frequently being more than 50% of what is owed on the card. Chances are that if you had that kind of money available to you, you would not be in the situation you face. If a repayment plan is reached with the credit card company, you may be able to afford that repayment if it was all you were obligated on. However for those who have 2, 3, 4 or more cards with high balances (along with whatever other debt burden you have) this often does not fix your problem as a whole. If you are in a position to pay off a sizable part of a single aggressive creditor, hiring an attorney to help you negotiate and arrange the best terms is advisable. I will talk more about this in an upcoming entry.

 

     Finally, if attempting to settle with your credit card companies fails you can find yourself facing a lawsuit filed against you. If you are dealing with a debt collector for a credit card company you may be in the even worse position of never having even been properly served with the lawsuit in the first place. In this situation, consumers only discover the problem when their paycheck is garnished up to 25% when they had not even known that had been sued. This is the nightmare situation that millions of Americans are finding themselves in with the explosion in the number of disreputable debt collectors which have sprung up since the Great Recession.

     If you find yourself anywhere along the credit card debt path described, it is not too late to deal with it. While you do not want to find yourself suddenly or unexpectedly with a paycheck or bank account being garnished, filing for bankruptcy protection even at that late stage could be your best option. It is always going to be to your advantage to deal with the problem you face before you get to the point of garnishment. By speaking with a consumer bankruptcy attorney in the Tuscaloosa area, you can find out what your options are to avoid the stress of dealing with these types of problems for years on end. You can even avoid or stop a garnishment, but the first step is to call for a free consultation to review your options.

 

-Kenneth

 

Categories: Chapter 13, Chapter 7