Are You Dealing with Increasing Credit Card Balances?

There is no doubt that many households have financial concerns during the COVID-19 pandemic. Many people are out of work or had hours reduced, and unemployment benefits do not come close to what they were earning prior to businesses shutting down. Bills, expenses, and basic household needs do not stop just because there is an interruption in your income, and more and more people are relying on credit cards to cover their expenses, groceries, and bills.

Credit cards might seem like a temporary solution to financial stress, though these balances can increase substantially and quickly. Once you start working again, you might be able to cover your other bills, but you will also be left facing thousands of dollars in credit card balances. You might make payments each month and watch the balance only increase due to interest rates. What happens if your credit card debt is unmanageable?

Effects of Credit Card Debt

Credit card debt can increase for many reasons, including the loss of a job, your child’s needs, unexpected repairs to your car or home, and much more. Many people who spend responsibly might find the need to rack up a credit card balance at some point. Having high credit balances compared to your available credit amount can lower your credit score very quickly. The question then becomes how to address this debt if you cannot keep up with payments or make any progress. 

Some credit card companies might offer temporary relief due to financial hardship, but this is not a long-term solution. If you fall behind on your payments, you can expect the collections calls and letters to begin right away – and persist unless you can get caught up. If you are in default, your credit card company might file a lawsuit against you to obtain a legal judgment. A judgment can result in the credit card company taking part of your paycheck or funds from your bank accounts until your debt is repaid. This can only make a stressful financial situation much worse.

Bankruptcy as a Credit Card Relief Option

If you are struggling with increasing credit card balances, you are certainly not alone. Sometimes, credit cards can help you survive financially at the moment, but how do you later find relief from those balances? One option that helps many people is Chapter 7 bankruptcy. 

Chapter 7 bankruptcy discharges unsecured debts such as credit cards. If you successfully complete the process, the court can issue an order that eliminates your responsibility to pay off your credit card balances and similar debts. Bankruptcy is not always the right choice for everyone, however, so it is important to discuss your options for credit card relief with an experienced Indiana bankruptcy lawyer. 

Discuss Your Options with a Merrillville Bankruptcy Attorney Today

The Whitten & Whitten helps many people in and around Merrillville address credit card debt and other debt-related matters. Contact us to consult with a Chapter 7 bankruptcy attorney today.