Bankruptcy, Credit Cards, and Even More About Credit Cards...

July 30, 2010 - PRLog -- Credit cards are a wonderful thing. You can charge something to day and pay it off in 20 or so days and it not cost you anything. I really think that was the original way people used them. On a special occasion you might need to carry a small balance and pay it off over the next 90 day with a small finance charge. I think in the early seventies the most any one would carry on their credit cards was less than a couple thousand dollars.
Well now the average balance for most people is now 20 thousand dollars or more with minimum payment of 500 a month and costing them 200 hundred in interest. That is with good credit miss a few payment on any of the cards and the interest is 600 a month with payments of a thousand or more.

This is why people have to look at other options to work something out with the credit cards. the credit cards will not work something out with you so they try some form of credit card counseling which is usually more or as much as you were trying to pay before. No company will guarantee that all of the creditor will accept this plan. Debt settlement will not work unless you have money to settle.

This is why so many people or forced in to filing some form of bankruptcy. Either the chapter 7 which is a liquidation of all unsecured debts mainly meaning credit cards and medical bill. The other choice is the chapter 13 which allows you to pay something back through a plan but at zero percent. In this process also helping you if you have fallen behind on your car or even your house.

Credit cards are a wonderful thing but so is jumping out of an airplane as long as your parachute opens.

I had a client in my office today that is going to be filing a Chapter 7 bankruptcy. As she looked over all her creditors she realized there were some credit cards that she wanted to keep out of the bankruptcy so she could continue to use them. Two of the credit cards were gas cards which she paid the balance off at the end of each month. She didn’t want them listed so she could continue to use them when she purchased gas. The Trustee understands the need for a gas card and usually will not object to the use of one as long as the balance is paid off each month.

The other credit card she didn’t want included in her bankruptcy was her Sam’s Card. She claimed that she liked to shop at Sam’s with her daughter (who is old enough to have her own credit card) and put the purchases on her credit card. I explained that since the balance was around $800 she needed to include it in the bankruptcy and not continue to use credit cards. As many clients, she didn’t understand why she would have to include a credit card if she was current on the payments.

The reason you cannot continue to use credit cards in a Chapter 7 is because you must have filed your case in good faith. Trying to discharge credit card debt on one end and racking up credit card debt on the other doesn’t show good faith. One of the questions that many Trustees ask is if you are still using credit cards. The appropriate answer is no.

For more information visit http://www.bankrupcy-alternative.com/payroll-deduction.html or call us directly. Here is another bankruptcy article http://www.prlog.org/10827933-bankruptcy-termination-of-a... and here is another http://www.prlog.org/10825588-bankruptcy-forced-place-ins... for your reading enjoyment.

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