Thinking about Bankruptcy after Holiday Credit Card Debt?

Posted on: April 6, 2017 at 1:12 pm

Most people in Tampa Bay pull out their credit cards during the holidays. Travel, family gatherings, gifts, and diners out, all add up quickly with the belief that it will be paid off in the future. Trends show that credit card debt raises though the first of the year, with diminished spending in February.

January roles around and the pleasures of the holiday season start to disappear with higher credit card balances. For someone already struggle with debt those few extra dollars for credit card payments can be the tipping point of financial chaos. Managing day-to-day expense gets more difficult which can lead to missed payments and debt going into collections.

In the US 40% of individuals with a credit card have debts in collections. When credit cards payments are late and minimums are not paid fees and interest can raise the total debt considerably. After the credit card company tries to collect the debt for months they may turn the collection efforts over to a collection agency. Collection agencies make money from the debt they collect, leading to vigorous attempts at collecting that debt. This can involve continuous phone calls to your home, cell phone and work. On some occasions, creditors will locate family members as a scare tactic to collect on the debt.

Credit card debt, especially from the holidays, can be a major factor when considering bankruptcy.  A difficult decision to make, but when mounting debt seems unbearable it is a viable option. According to the US Court statistics over 35,000 personal bankruptcies were filled in Florida’s Middle District, which covers the areas around Fort Myers, Tampa, Orlando and Jacksonville. Nationally, almost a million bankruptcies were filled in 2014. Bankruptcy is quite common, just not talked about that often.

When making a decision to file bankruptcy consider a few things:

  • File annual taxes before filing bankruptcy; a refund could be viewed as income
  • Don’t take large cash advances over $900 on credit cards 10 weeks before filing for bankruptcy; it may not be discharged and considered an invalid transfer.
  • Avoid extravagant purchases, over $650, on credit cards 3 months prior to filing; this can be viewed as fraud.

After filing for bankruptcy:

  • All collections efforts must stop due to the automatic stay in place.
  • It could stop a foreclosure sale
  • Debt can be discharged
  • Cars and homes can be kept with new payment plans
  • Provides you with an opportunity to reestablish your credit and build a positive financial history

FL Legal Group with offices in Tampa and Clearwater, can help sort through your options surrounding bankruptcy. Having over a decade of experience in bankruptcy and collection efforts in court, the attorneys provide personal service and a sense of security while helping you restore your financial health. Contact our bankruptcy office in Tampa today for help.

Author: Nicki Asmer
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