Bankruptcy is a serious decision that has lasting consequences and should not be taken lightly. Chapter 7 bankruptcy remains on credit reports for 10 years, while Chapter 13 bankruptcy remains on for seven years. Therefore, filing for bankruptcy should be seen as a last option and only for those that truly have no other alternative. It is best to consult with a West Palm Beach bankruptcy attorney to find out if bankruptcy is the right choice for you. If it is credit card debt that is plaguing someone’s finances, ending credit card payments should be considered and filing for bankruptcy should be reserved only if he fits within the following criteria.
Not able to afford to make the minimum payments on credit card debt.
Bankruptcy might have to be considered if the debtor is unable to make minimum payments or has already missed multiple monthly payments. If this is not the case and the debtor can afford to pay off his credit cards or has enough disposable income, he may not even qualify for Chapter 7 bankruptcy and will need to pay off the debt with a Chapter 13 repayment plan. For those that can still afford to make credit card payments but are still struggling financially, there may be ways to lower their minimum monthly payment amounts without bankruptcy. Debtors can negotiate with their credit card companies to settle the debt for less than the full balance owed. Another possible option is for the lender to agree to lower the interest rate and combine credit cards balances into one loan debt consolidation. However, bankruptcy may be necessary for debtors who cannot afford to pay back their credit card debt and will not be able to in the near future.
Being harassed or sued by creditors.
After people repeatedly fail to make their monthly credit card payments, credit card companies or debt collection agencies become less and less friendly. For some, the constant calls and harassment from creditors is enough to push them towards bankruptcy relief. However, things get really serious if the credit card company or debt collection agency decides to file a lawsuit against the credit card holder based on his income or the amount of debt that has been accumulated. If the lender’s case is successful, garnishing the debtor’s wages or even taking away assets may be the next step in seeking retribution. If a lawsuit is imminent and the credit card company is unwilling to negotiate, declaring bankruptcy may be in the debtor’s best interest.
If both or either one of these criteria is met, filing for bankruptcy becomes necessary. The type of bankruptcy that is filed will depend on other factors, such as the debtor’s income and the amount of property he owns. Only when the decision to file for bankruptcy is final and will be carried out soon should credit card payments be halted.
If you are struggling to pay for your credit cards due to financial hardships, speak with an experienced West Palm Beach bankruptcy attorney today. Call the law offices of Kelley & Fulton, our legal experts are happy to discuss whether bankruptcy is the right option for you.