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What kind of expenses are responsible for most credit card debt?

It's easier than ever to put just about any expense on your credit card. You can pay your health insurance premium, utility bills and more with your cards. If you're able to pay off your credit card balance every month and get some free miles on your favorite airline in the process, this may be a wise move. However, for too many people, more places to use their credit card simply means more credit card debt.

In a recent survey by CNBC and Morning Consult, though, less than a quarter (23%) of respondents said that the majority of their credit card debt was caused by spending on necessities (like utilities and groceries). Just 12% reported that medical bills (which are often a necessity as well) were the main cause of that debt.

Think twice before accepting joint ownership or cosigning

If you have a child or other family member who is unable to get the loan or credit card they want on their own, they may ask you to be a cosigner or joint account holder. Before agreeing to do this, it's essential to understand what this could mean for you -- particularly if your loved one is unable to make their payments.

Cosigners and joint account holders are both responsible for paying whatever debt is owed if the primary account holder is unable or unwilling to. However, they typically have no access to the account and may not even be allowed to see the status of it. That can be dangerous, since a loan, line of credit or credit card can be seriously overdue before they're aware that there's a problem.

Signs it's time to file for bankruptcy

You know you have debt problems, but how bad are they? You don't want to file for bankruptcy too quickly, but you also don't want to put it off too long. After all, you could be facing issues like wage garnishment. Every extra month that this garnishment goes on is more money that you lose.

So, how do you know that it's time to file? Here are a few signs to look for:

Mississippi leads the nation in delinquent home loans

In the first quarter of this year, Fannie Mae and Freddie Mac reported that they prevented nearly 39,000 foreclosures. According to the Federal Housing Finance Agency (FHFA), these two government-sponsored enterprises (GSEs) have stopped over 4 million foreclosures since the height of the recession in Sept. 2008. In the majority of cases (over 3,600,000), homeowners were able to remain in their homes.

Over half of those foreclosure prevention actions involved permanently modifying the terms of the homeowners' mortgage loans. In Q1 2019, over one-third (38%) of the modifications reduced monthly mortgage payments by over 20%.

Do you have concerns about filing for Chapter 7 bankruptcy?

When facing serious financial trouble, it's natural to learn more about Chapter 7 and Chapter 13 bankruptcy. You may never go down this path, but the information collected will help you better understand your situation.

The benefits of Chapter 7 bankruptcy are easy to see. For example, if you qualify, you're able to discharge many of your debts. This puts you in a position for a fresh start.

Tips for quickly paying down credit card debt

When credit card debt piles up, it's easy to believe that your entire financial situation is heading down the drain. While you're in a tight spot, it doesn't mean you should give up.

There are many ways to quickly pay down credit card debt, including the following:

  • Focus on small chunks: Rather than look at your credit card debt as a whole, focus on eliminating small chunks at a time. For example, if you have $20,000 in debt, focus on paying it off $2,000 at a time.
  • Start with the credit card with the highest interest rate: Eliminating this first will save you the most money, as you're no longer subject to large finance charges for carrying a balance.
  • Opt for a balance transfer credit card: Not only does this allow you to consolidate your credit card debt, but you can also take advantage of a zero percent introductory rate for a period of 12 to 24 months.
  • Negotiate with your credit card company: It never hurts to ask if there is anything they can do to help your situation. For example, you may be able to negotiate a lower rate or the removal of late fees.

Why filing for Chapter 13 bankruptcy could be the best choice

Dealing with overwhelming debts can feel extremely stressful, and can ignite panic or denial for many. Panicking about debt can be a bad thing to do because it can lead to making irrational decisions. For example, some people decide to take out high-interest loans when worrying that they are unable to pay their bills. In addition, being in denial can be equally destructive. Those who bury their head in the sand can get deeper into debt.

This is why it is so important to face up to your financial situation and to calmly consider the options that you have at your disposal. A common course of action for debtors is filing for bankruptcy, and there are several bankruptcy options that you will have as an individual debtor. Chapter 13 bankruptcy tends to be a popular option. The following blog will address some reasons why Chapter 13 bankruptcy could be the best bankruptcy option for you.

How will you discuss bankruptcy with your family?

If you come to the conclusion that bankruptcy is the best way to improve your finances for a better future, it's time to push forward with the appropriate steps.

Before doing so, it's important to discuss your decision with your family. This is particularly true of your spouse, as they need to be included from start to finish.

Did you know your bank can help you stop a foreclosure?

If you receive a foreclosure notice from your bank, it's easy to believe they're the enemy. This can lead you down the wrong path, such as hiding from the lender as you attempt to figure things out on your own.

Rather than take this approach, it's important to understand that your bank is actually on your side. Usually, they don't want to foreclose on your home but would rather help you work things out.

Why do people file for bankruptcy?

You know, of course, that you may file for bankruptcy when you can't pay off your debt. You may worry about losing your house or your car. You want a solution that allows you to keep your life intact and eliminate your debt. Bankruptcy may offer that, and it's worth considering.

But why do people find themselves in this position in the first place? What you'll find is that it may not be your fault at all. It's not because of excessive spending or reckless use of money. It's just an unfortunate circumstance that you couldn't avoid, and you're looking for a way out. It's that simple.

McBride Law Firm

McBride Law Firm
301 Jackson Street Suite 101
Alexandria, LA 71301

Phone: 318-625-0471
Phone: 318-625-0471
Fax: 318-445-8066
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