If you listen to the news, then it sounds like the economy is clipping along at a considerable pace. Yet, despite this news, many Roanoke-area residents find themselves struggling to get by. Oftentimes they live paycheck-to-paycheck and are only one unexpected expense away from financial ruin. Others have already turned to credit cards to help makes ends meet.
Economy experts are seeing an increase in credit card debt, too. In fact, it is at its highest level since 2008, with the average household carrying more than $9,000 in credit card balances. To make matters worse, those who are unable to meet their monthly obligations on these debts can see enormous penalties and skyrocketing interest rates. These factors can quickly lead to debt that is out of hand and insurmountable.
This is why consumers need to be careful with the way they use their credit. But the sad reality is that many individuals are forced to turn to credit cards to help cover unexpected medical expenses, lost wages due to a layoff, or bridge the gap from paycheck-to-paycheck because their income is insufficient to cover their needs. This type of debt is hitting people of all classes, too, not just those with low incomes. Therefore, those who are facing overwhelming credit card debt should carefully consider what they can do to obtain debt relief.
One option is to seek personal bankruptcy. Depending on the debtor’s income and other factors, he or she may pursue liquidation bankruptcy through Chapter 7 or a repayment plan through Chapter 13 bankruptcy. While Chapter 7 requires debtors to sell many of their assets to repay creditors as fully as possible, Chapter 13 can allow debtors to keep most, if not all, of their assets. The debtor simply needs to stick to a court-mandated payment plan that is reasonable. If this sounds like an enticing option, then sitting down with a qualified legal professional may be the next step.