credit card problems


Filing Bankruptcy

Is filing bankruptcy what you should do to eliminate the huge load of debt you are carrying?  Wondering this, you may feel your stomach clenching into knots. You begin to hyperventilate and fear a full blown panic attack is eminent.

OK - mentally and emotionally step back a bit and breathe normally - your reaction is typical of most consumers who realize for the first time that filing for bankruptcy may be their only alternative.  The information provided here is not legal advise, but it may well make it a little easier to determine if legal debt repudiation is for you.

The very first step that you should take is to review all your debt and assets. Set up an organized list of all your monthly living expenses. You can start the list with your monthly mortgage or rental payment. The very next thing is to put the car payment. Next the light bill, food and so on. Do not include any other debts such credit cards, finance loans etc.

After paying your monthly living expenses it's time to consider the question, "Can I pay off the rest of my accumulated debt, with what they are charging me for interest, within three years, with the money I have left over?" Forget the minimum amount due each month and use the total repayment of your debt including interest charged over the next three years. There are tools online that will enable you to make this calculation.

Next, review and take every step that you can that will increase your cash flow to reduce the debt payment over that critical three year time frame. Take the steps of reducing monthly expenses, such as night out on the town, golf dates, family excursions, resetting the thermostats for maximum efficiency. Perhaps taking on a second job to increase the immediate cash flow. 

If you have gone though every step above perhaps its time to consider professional credit counseling to help you determine if filing for bankruptcy is your only realistic alternative. Exercise caution when seeking outside help. as many of the credit counselling service will cause more harm than good.   Become familiar with any accreditation requirement for your state; some courts keep a list of approved services.

It may be that looking at your financial picture, you realize that no amount of negotiation can help you, hire an attorney specializing in this area of the law.
Filing bankruptcy is a very difficult decision, however if you cannot get yourself clear of debt in three years it may be the only alternative available.  Spending year after year of your life trying to survive under a mountain of debt is not the answer - that is why legal options are available to you.