Overwhelmed by Credit Card Debt? Give up and declare bankruptcy.

You need to look into your crystal ball and determine if you are ever likely to have either the earning power or reduced expenses needed to untangle your credit card debt problem. If you see some upside in a future job, or will be paying off a car or another type of loan soon, you may be able to address the credit card debt, even if it has gone to collections and has tarnished your credit. But if the credit card payments are behaving like an anchor around your neck, or if your credit is already so bad that you will never get a loan, or if the bank is getting ready to sue you and it can result in garnished wages or liens on property, it may be time to consider bankruptcy.

Bankruptcy is a way to start over. The laws vary in each state, but in some cases you may be able to discharge all your credit cards (unsecured debt) without giving up property. For this relief, you have to take a big hit in your credit, and may have problems in the future in getting loans, buying a home, or even obtaining a job. Also, don’t overlook the emotional impact of a bankruptcy and your ability to deal with it for the rest of your life.

Consult with a local CCCS agency approved by the bankruptcy court (try the CCCS of Raleigh if you live in Joe SuperSaver’s Raleigh, NC area) before making this decision. You’ll need to obtain a counseling certificate from them to file the bankruptcy, and they can review your budget and debt situation and see if there are other alternatives. If not, they can refer you to a competent attorney who will usually specialize in bankruptcy law and who can answer all your legal questions on this issue.

Back to Post