Credit Card Bankruptcy
It’s no secret that the United States economy has been driven by consumer credit card spending. Credit card companies have spent billions of dollars each year aimed at convincing us to buy on credit. More than a billion credit card offers are mailed out each year in the United States each year. Solicitations often begin at the age of 18, when credit card company representatives swarmed colleges campuses and convinced financial inexperienced college students to overextend themselves and get into credit card debt. Credit card companies then continue to extend credit so that when students graduate and begin earning money all of their excess disposable income goes toward credit card minimum payments.
In late 2009, many of the credit card companies increased many credit card interest rates to 29% or more, causing minimum payments to double or even triple. For people who had low balances, this was not a big issue. They had the option of not using their cards so that they would not carry high balances at a high interest rate. But for clients who already had high balances that they had budgeted to pay off over time, the sudden increase in interest rates, and doubling or tripling of minimum payments, forced them to retain my services to file a bankruptcy. For many of my clients in Maryland bankruptcy became the only logical solution to obtain debt relief from these high interest credit cards. From December 2009 on, many clients started calling me and explaining that they were doing fine prior to the increase in their interest rate but now needed to file a credit card bankruptcy, that is, a Chapter 7 bankruptcy filed for the main purpose of eliminating high interest credit card debt.
Carrying a high balance on a credit card can be particularly painful if you currently are unable to make payments. For example, at 29% interest, without making any payments on your cards, your credit card balances will more than double in 3 years. $30,000 becomes $60,000 and $60,000 becomes $120,000, and then bankruptcy becomes unavoidable. So you make the logical decision to file bankruptcy now and start rebuilding your credit sooner rather than later.
The fact is, for many people who have credit card debt and are making minimum payments or less, if they do not file for bankruptcy they may never get true debt relief and they will be stuck in an endless spiral of credit card debt that they will never escape. Bankruptcy is the only way that they can get out of debt, escape from the hole of debt they are in, and get above ground.
Then there is the guilt. But really? In this age of billion dollar bailouts for banks that gave you credit cards, you really have to stop and ask yourself why you feel guilty. Does it make sense? You are exercising your constitutional right and federal right to file for bankruptcy relief to get a fresh start. In fact, the credit card companies have already accounted for the possibility that you might file a credit card bankruptcy. That’s why your credit card company is charging such a high rate of interest, to account for the losses it expects to suffer from people who need to file for bankruptcy relief. Take a look through your credit card statements and see just how much you have paid in interest, that is, finance charges. You may find that you have paid more in finance charges than the current balance of your card.
If you need to eliminate your credit card debt, call us today for a free consultation. We are Maryland Bankruptcy Attorneys who help people file for bankruptcy every day. Call -1-800-NEW-START today.
David L. Ruben, Attorney at Law