We talked earlier this week about the various ways to handle credit card debt; however, if you’re still struggling to make your credit card payments and running out of options, bankruptcy could be the solution you need.
Through debt settlement and counseling services, you’re still going to have to make payments towards your debt. The bankruptcy process allows you to start over and reset your finances—it allows you to discharge your unsecured debts like credit card debt and medical bills.
People who are struggling to pay minimum payments often simply make interest payments and are not paying towards a principal balance. If you fall behind, credit card companies can turn you over to collections agencies. If you file for Chapter 7 or Chapter 13 bankruptcy, an ‘automatic stay’ goes into effect that blocks creditors form taking any action to collect debts.
If you’re thinking about filing for bankruptcy, you should contact an attorney to determine your eligibility. For Chapter 7 or Chapter 13 bankruptcy, you must take what is called “the means test”. The test is a form you must file with the bankruptcy court that measures your monthly income with the median income of similar-sized households in your state. If you’re unable to file for Chapter 7 bankruptcy, you could be eligible to afford the payment plan that is agreed to in a Chapter 13 bankruptcy.
If you feel like you are in a financial hole and are being harassed by creditors, contact our Washington DC and Maryland bankruptcy attorney now for a free consultation. We can offer you the best solution for whatever your debt issues may be.
Law Firm of Kevin D. Judd– Maryland and Washington DC bankruptcy lawyer