The Board of Governors for the Federal Reserve recently reported to Congress that American's credit card debt decreased in 2012 to a total of $850 billion. This number, which is still high, is quite a drop from the $1 trillion debt carried by Americans during the Great Recession. Also, credit card interest rates dropped to their lowest levels since 1994. Experts cite decreased access to credit during the recession for the drop as well as decreased card usage.
While this report may seem like good news, far too many Americans continue to face financial challenges as a result of their credit card debt. The loss of a job or an unexpected medical issue can arise and throw a financial curveball to anyone at any time. Sometimes these individuals turn to credit cards and rack up large amounts of debt. The high principal balance, coupled with high interest rates, render it difficult to make minimum payments. These individuals may be harassed by creditors, become stressed and depressed, and feel as if there is no hope for their financial future.
An experienced attorney will tell these individuals that there is hope. By filing for bankruptcy, these individuals can shed their debt and achieve a fresh financial start. In many cases, those facing excessive amounts of credit card debt will choose to file for Chapter 7. Under this type of bankruptcy assets are sold and any money received from the sale is used to pay off creditors. Any debt remaining after this process is completed is forgiven. Additionally, and importantly, several exemptions exist that may allow a petitioner to keep certain assets.
The myths about bankruptcy may leave one feeling scared by the simple thought of discussing it. An experienced bankruptcy attorney can sit with a client and discuss the truths and the falsities of bankruptcy. The discussion of the process will hopefully put the client at ease and leave her feeling hopeful for her financial future. If credit card debt is drowning an individual, she should not hesitate to discuss bankruptcy with a qualified attorney.
Source: The Times Weekly, "Credit card debt drops to $850 billion," Charlene Crowell, Aug. 21, 2013