When Credit Card Debt is Anything but Merry and Bright
Holiday spending often causes concern for individuals and families alike, as their average monthly spending increases substantially in comparison to most other months throughout the year.
Specifically, in terms of holiday credit card spending, “those who incurred holiday debt [in 2020] borrowed $1,381 on average,” research by Magnify Money found. “That’s up from $986 in 2015, an increase of nearly $400, or 40%, since we first started conducting this survey five years ago.”
Thus, if you find yourself overwhelmed by the sheer amount of credit card debt you are buried beneath, bankruptcy may provide the relief you’re looking for. Here’s how:
Holiday Spending Hardships
Seasonal gifts, restaurant meals, and travel expenses are liable to demand a fair amount of money as the holiday season draws near. Oftentimes, such expenses may be perfectly manageable on their own — until you factor in pre-existing debt, that is.
“If you use [credit cards] to purchase items you couldn’t otherwise afford — or max out your cards to cover routine monthly expenses — credit cards can quickly compound your debt and hurt your credit score,” as explained by FINRA.
Consequently, budgeting is of the utmost importance come time to overcome the obstacle that is overspending. Should this not prove comprehensive enough to offer you the fiscal relief you need, however, bankruptcy offers another path to freedom.
How Bankruptcy Can Help
When it comes time to consider how you’ll file, understand that both Chapter 7 and Chapter 13 bankruptcy can provide you with relief, albeit the ideal filing type will depend upon your unique circumstances.
“Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments and utility shut-offs, and debt collection activities,” according to the Federal Trade Commission (FTC). “Both also provide exemptions that allow you to keep certain assets, although exemption amounts vary by state.”
Specifically, Chapter 13 bankruptcy is referred to as “reorganization bankruptcy,” wherein you may restructure your finances and consolidate your debt into one easy payment plan. You then complete those payments over a period of three to five years on average.
Chapter 7 bankruptcy, on the other hand, is liquidation bankruptcy, wherein discharge from one’s unsecured debt typically comes within an average of five or six months. This type of bankruptcy is the most common for individuals seeking relief from considerable credit card debt.
The Gift of Financial Freedom
The holiday season is upon us, which means the new year is also just around the corner. If financial freedom is a leading goal of yours for 2022, we want to assure you that, with our team, you’re never alone.
Here at Dolaghan Law, we specialize in providing our clients with the knowledge and resources they need to successfully navigate bankruptcy filing, thereby providing them with a clean fiscal slate.
If you’re ready to learn more, contact us today by calling 904-354-4935! We look forward to helping you achieve a debt-free life in the coming year.