Are you struggling with credit card debt and other unsecured debt that you are unable to pay? Has your balance gotten so out of hand that you’re not sure what to do? Are you getting collection calls? Has a law firm filed a collection lawsuit against you? Has a judgment been entered against you? Are you worried about wage garnishments? Do you have valuable assets like a home, car, bank accounts that might be taken to pay a judgment?

Credit cards are one of the primary driving forces behind bankruptcy. Many people in South Carolina struggle under the burden of credit card debt. The average family has $6,006 of credit card debt, according to a Harris Poll study. Medical emergencies, job loss, divorce, pandemics, car accidents, can quickly cause someone to fall into financial distress.

Filing for bankruptcy could be a good option. Here are a few tips to help you understand if you should stop making payments on your credit card debt and consider bankruptcy as an option:

Determine whether you can afford to pay off the debt

If you’re considering bankruptcy, the first step is to determine whether you can afford to pay down or pay off your credit card debt in a reasonable amount of time. Based on your income, you may or may not qualify for Chapter 7 bankruptcy, which may completely wipe out your eligible debt. If you have what the Court calls “disposable income”, you may not be able to cancel all the credit card debt and instead may have to file a Chapter 13 bankruptcy and pay back some percentage of  your debt on a repayment plan that is between 3 to 5 years long.

The lower your household income and the lower your assets, the more credit card debt you may be eligible to cancel. The opposite is also true; the higher your income and the higher your assets, the less credit card you may be able to cancel.

Under these circumstances, you may be able to negotiate with the creditor and pay off your debt for less than you owe. Debt consolidation is another option under these circumstances. I hope clients with debt repayment plans and I file bankruptcy cases to cancel debts they cannot afford to pay. If you are truly unable to pay off your credit card debt, then bankruptcy could be the best choice for you.

Assess Your Interactions With Creditors – Are You Being Sued? Harrassed?

When you stop paying your credit card bill, you will begin to receive calls from the creditor and its collection agents. The farther behind the payments get,  the more frequent the calls will become. These collections calls are often one of the reason people consider filing for bankruptcy. The credit card company and their collection agents don’t care if you can afford to make the minimum payment or not. They don’t care if use money for a house payment or car payment to pay them. Their only goal is to get you to pay whether you can afford to pay or not.

All of your credit card companies have the right to file a lawsuit against you. If the credit card company files a collection case, the Court is required to give them a judgment against you as long as you are  behind on the payments.  A judgment is a piece of paper signed by a judge that spells out how much  you owe on the debt. The judgment will automatically attach to land you own and let the company you owe the money to continue to collect the money for another  ten years. You may face garnished wages or loss of assets. Under these circumstances, filing for bankruptcy  may help you keep your wages and valuable property.

You need to act quickly if you want to prevent a credit card company from getting a judgment against you. You must file a bankruptcy case before the Court enters a judgment against you.

Calculate the amount of nonexempt property you own

Depending on your income and assets, Chapter 7 bankruptcy may not be ideal for you. You may not be eligible for a Chapter 7 if you have too much “disposable income”.  If you own a lot of property, the bankruptcy trustee may sell your assets to pay off your creditors.

Under Chapter 13 bankruptcy, you will keep all your assets, but will have to pay back some percentage  of your unsecured debts,

Be sure to review the bankruptcy exemption laws in your South Carolina to try to decide whether filing for bankruptcy may help.

Making Continued Payments

Generally, you should stop making credit card payments once you have begun the process of filing for bankruptcy. Whether you should continue to make payments on credit card or other unsecured  debts before you make  a decision about a possible bankruptcy can be complicated and depends on your situation.  I can help you quickly – I will provide you with a free case review within 24 hours.

Determining What Is Right For You

I am offering a FREE consultation so that you can thoroughly understand your options. I will personally take your call to explain the bankruptcy process and costs so you can make an informed decision for your future. You are not hiring me with this call. You are simply learning more about your options. Our discussion will be fully confidential.