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These days, cash is no longer king.
Nowadays, thanks to flashy rewards and “free” sky-miles with every purchase, most people are using credit cards for their everyday purchases.
Unfortunately, credit cards have sky-high interest rates, and it becomes very easy for your debt to spiral out of control. If your credit card debt is too high for you to handle, bankruptcy might be the right option for you.
Most people in America carry a certain amount of credit card debt and never have an issue. However, one hospital visit, losing a job, or some other mishap can tip the scales, making it impossible to get caught up on debt. When this happens, it’s time to explore your options. If your credit card debt was passed along to a debt collection service, it may be past time to consider bankruptcy.
Instead of using your precious income to pay an endless series of credit card payments, you can protect yourself, your family, and your future. With bankruptcy, you can start saving money for retirement or an emergency fund. You can perform necessary repairs on your house and pay for your child’s education. Bankruptcy can provide you with a fresh financial start to make all of those dreams a reality.
If you find yourself under a mountain of debt, a personal bankruptcy filing can help you get rid of your credit card debt and get a fresh start. For help deciding the best approach to take to get rid of your mounting credit card debt, contact our Colorado Springs bankruptcy lawyers today.
With their high-interest rates, credit cards can make it a little too easy for debt to spiral out of control.
According to Debt.org, the average credit card debt in Colorado is $6,416 which is only a few hundred dollars above the national average of $6,194. And one of the most common reasons people file for bankruptcy in Colorado is due to overwhelming credit card debt.
But our Colorado Springs bankruptcy attorneys have found that many clients view bankruptcy as an absolute last resort, and first turn to debt relief companies to help end their struggle with credit card debt.
You’ve undoubtedly seen advertising for credit counseling and debt consolidation services. Use caution; most of these companies are not offering actual legal counsel, so it’s unlikely they can help you achieve any significant relief.
What they usually do is promise to negotiate a lower balance with your credit card company while charging you 15-25% of your debt amount in exchange for their services. You then stop paying your balance to the credit card company and instead pay the monthly payment plus the debt relief company’s fees directly to the debt consolidation company.
However, your creditors are under no obligation to agree to a lower amount or to wait for payment and may instead sue you or damage your credit rating. Furthermore, even if the credit card companies cooperate, you might not be able to afford the payments to the debt settlement company.
That’s not to say that every credit counseling or debt relief company is predatory. The Colorado Uniform Debt Management Services Act (DMSA) regulates companies that offer and provide debt management services to Colorado residents. However, it only regulates those companies within Colorado, and some predatory debt relief companies are located out of state.
For more information on DMSA and its rules and regulations, head over to the Colorado State Attorney General’s website. You can also contact our Colorado Springs Credit credit card debt relief attorneys for a no-cost case consultation.
Countless people in El Paso county currently find themselves buried under mountains of credit card debt. Getting ahead of this debt is even more difficult given that many rely on credit cards for everyday purchases since they offer such attractive rewards for using them for every purchase. While some people with large credit card debt in Colorado Springs pursue relief options such as debt consolidation or negotiating with the credit card companies, many have determined their best option is to file for bankruptcy.
Listed below are some of the most commonly asked questions about credit card debt, answered by our experienced Arapahoe County area debt relief attorneys.
Most likely, although the answer depends on whether you’re filing for Chapter 7 or Chapter 13 bankruptcy. Because credit card debt is unsecured, it will automatically be discharged if you file chapter 7 bankruptcy, but if you file chapter 13 bankruptcy in El Paso county, your credit card debt will be made a part of your debt repayment program.
Typically, you cannot keep credit cards if you file for bankruptcy. When filing the petition for bankruptcy through the United States Bankruptcy Court District of Colorado, you must submit any and all debts you owe to creditors, including credit cards. Even if you have a card in your name with a zero balance, that creditor will still be made aware of your petition to file bankruptcy and you will likely have that credit card canceled.
Absolutely not! Maxing out your credit cards when you know that you’re about to file for bankruptcy is considered fraud. During your bankruptcy case, the defrauded creditors could object to your discharge with an adversary hearing. If that happens, the court may allow the defrauded creditor to collect some or all of the credit card debt or, worst-case scenario, dismiss the bankruptcy case completely.
Most individuals who file for bankruptcy have been able to obtain credit within a few months of completing their bankruptcy case in Colorado Springs. If getting a credit card to build up your credit again after filing bankruptcy is your goal, getting a secured credit card is your best option. Unlike traditional credit cards, which offer you a pre-set spending limit, secured credit cards require you to pay a cash deposit upfront to guarantee your credit line.
5. Can I declare bankruptcy on credit card debt alone?
When filing for bankruptcy in Colorado Springs, you must declare all of your debt when submitting your paperwork to the Court. This includes medical debt, past-due mortgage or vehicle loan debt, and of course, credit card debt. This, of course, presupposes that if you’re filing for bankruptcy in Colorado, you have more than just credit card debt that needs to be discharged. For more information about what debts bankruptcy can and cannot discharge, please contact one of our Colorado Springs debt relief attorneys for a consultation.
It can start with the best of intentions. You get a credit card and occasionally use it for small things, but you always make sure to pay it off every month. Then the credit card company rewards you with more credit. Then maybe you think to yourself “they wouldn’t raise my limit if they didn’t think I could pay it off” and you start using your card more and more frequently. Before you know it, your credit card debt can swell to a point where your minimum payments are so high that you can’t pay your house and car loans.
If you are having trouble making a dent in your mounting credit card debt and are thinking about filing for bankruptcy, you should contact our Colorado Springs bankruptcy attorneys to find out what options are available to you. We offer a free initial consultation to all clients. To set up an appointment with an experienced El Paso County debt relief attorney, reach out today.