The Federal Reserve recently released a report that unveiled that Americans owe more than $1 trillion in credit card debt, collectively. While this may sound like an economic boost on a national level — people are buying big items and using their credit cards, after all — it can wreak havoc on an individual’s person’s financial situation.
With all of that debt, there are surely many individuals and families out there right now who are wondering how they are ever going to pay off their mountain of debt. For some, they may take the “snowball” approach, where they target smaller debts first and strategically pay them off over time. Others may go for the “avalanche” approach and pay off the big-interest items as soon as possible.
Others still will choose a third option: bankruptcy. Now that terms often makes people cringe. Bankruptcy has a stigma about it, there’s no doubt about that. However, this is a critical legal tool that can help people who are in debt get out from under that crushing figurative weight. Whether you ultimately get a Chapter 7 bankruptcy, a Chapter 13 filing or another form of bankruptcy, it can help clear out past debts through the discharge process and get you back on solid financial ground.
Bankruptcy isn’t a fun process, but it is a practical and helpful one. With that said, you should never go through a bankruptcy alone. Talk through your situation with an experienced bankruptcy attorney.
Source: CNBC, “Americans owe $1 trillion in credit card debt—here are 2 proven strategies for paying it off,” Emmie Martin, April 14, 2017