Credit cards are an excellent way to pay for large purchases. When you have one or more credit cards, you can easily make major purchases and pay for them over time. However, when the balances get out of control and you owe more than you can reasonably pay every month, the same credit cards that were so useful to you at one time can be a significant source of stress. Most of the time, excessive Credit Card Debt comes about due to a significant financial event, such as job loss or divorce, rather than excessive spending.
If you need to use your credit cards to pay for your living expenses because you have lost your primary source of income, it can be very difficult to make the monthly minimum payments on your accounts. Because many people do not find new jobs quickly after they are fired or laid off by their employer, credit card bills just get higher and higher until the cards are eventually maxed out. When you are unable to make payments on your current cards, getting new ones usually isn’t an option. If you find yourself in this situation, you need to take action.
One of the first things you should do is talk to a credit counsellor. If there is a way to get your Credit Card Debt under control, a credit counsellor can help you figure it out. In some cases, especially those where the debtor has no job or steady source of income, bankruptcy is the best choice. By filing for bankruptcy, you can reduce or even eliminate your credit card and other unsecured debts. This action might give you a fresh start and allow you to concentrate on finding suitable employment without worrying about constant phone calls and letters from creditors.
Bankruptcy is not something you should do without carefully considering all of your options. Declaring bankruptcy will leave a mark on your credit file that can remain there for up to 10 years, making it harder to get new credit. However, if you can’t find a way to settle your debts with the credit card companies, bankruptcy is certainly worth your consideration.
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