TOUGH financial times caused by the pandemic are pushing tethered consumers over the edge. Delinquencies and delinquent credit card balances are on the rise again. Faced with layoffs and tough economic times, many people are turning to using their credit cards to pay for basic living expenses like food and shelter. Many people turn to their credit cards in the hope that it will be nothing more than a temporary solution “until things get better.” The bad news is that credit cards come with a hefty price tag attached: sky-high interest rates, not to mention late fees and over-limit fees.
Once credit cards run out, some people resort to even more desperate measures just to make ends meet. Lately, I’ve seen a lot of people go as far as to get some of these so-called “payday” or “emergency” loans, which are ten to thirty times worse than credit cards! In most cases, the interest rates on these loans can range from 390% to 900% APR if you continue to “roll over” the loan (i.e. request an extension of time to pay)! Can you believe it? I have seen clients who have 2, 3 or sometimes more payday loans at the same time. No wonder these people are broke even before payday arrives! Loan sharks often take advantage of people who have bad credit and are already in too much debt.
If you’re struggling with debt, you may find it increasingly difficult to catch up each month. If some of your accounts have been turned over to collections, this is even worse because this means that your creditors can sue you at any time. Once they get a judgment, creditors can garnish your wages or garnish your bank accounts. Some people become paralyzed with fear and do nothing, hoping that somehow, by ignoring their debt problems, creditors will simply give up. Be realistic. You can’t ignore your debt problems. If you do nothing, one of these days you’ll realize that your inaction has simply made your debt problems worse.
If you’ve tried everything you can but nothing has worked up to this point, should you file for bankruptcy as a last resort? Bankruptcy can often be an option for many people who can no longer pay their debts. In Chapter 7, credit card debt, personal loans, medical bills, and most types of unsecured debt can be eliminated. That means you can start fresh and rebuild your credit instead of having all your delinquent debt reported to the credit bureaus every month. Your fresh start begins the day your bankruptcy case is filed and creditors can no longer collect from you. For the first time perhaps in a long time, you can finally breathe and feel like a human being again.
If you can pay a certain amount each month, you may also qualify for Chapter 13 debt consolidation to significantly lower your monthly debt payments. In most cases, credit card payments can be reduced to half (or even less) than what you are currently paying. You also pay 0% interest on your credit cards and can get out of debt in 3-5 years, depending on the length of your Chapter 13 plan. If you’re in foreclosure, Chapter 13 can also help you save your home and help you update your payments.
If you have debt and need to find the best solution for your situation, call toll-free 1-866-477-7772 to schedule a free consultation.
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NOTE: Due to the COVID-19 pandemic, I am offering free PHONE consultations to anyone who needs help dealing with their debt problems.
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No part of the information contained in this document is intended to provide legal advice for any specific situation. Attorney Ray Bulaon has successfully helped over 5,000 clients get out of debt. For a free evaluation of your situation by an attorney, call the Law Offices of RJB TOLL FREE 1-866-477-7772.