For some, the idea of filing for bankruptcy is an absolute taboo subject, something that they associate with failure and work hard to avoid at all costs. For others, bankruptcy represents a life preserver when they feel like they’re drowning – a way to get their feet under them again and return their lives to some semblance of normalcy.

Just as there’s a wide range between those two extremes, there’s a huge range between levels of credit card debt and how it impacts an individual consumer. The national average credit card balance hovers somewhere between $5,000 and $6,000. For some, paying that off represents a bit of belt-tightening and choosing to skip some unnecessary purchases. For others that is an insurmountable amount. Where you fall between the two determines whether bankruptcy is your best solution to credit card debt, and that’s because you need to weigh the positive outcome of eliminating your liabilities against the negative impacts that are attached to filing for Chapter 7 or Chapter 13 bankruptcy.

If you have been receiving harassing phone calls, see no way to pay your debts and fear losing your home or other assets, then the relief offered by bankruptcy is a huge quality of life issue. It will put you back on the road to economic health, regardless of the negative consequences attached. If, however, you have the option of finding a way to pay your credit card debts down, you need to consider that you may not actually qualify for the Chapter 7 bankruptcy that would discharge your debt (only those who pass a “means test” showing that their median income over the last six months is under that of the same sized family in your area qualify) and that those who successfully file for bankruptcy are stuck with its impact on their credit rating for several years. If you are considering making a big purchase, such as buying a house or a vehicle, you may find that your filing will work against your ability to borrow money at a competitive interest rate until the filing has cleared your records.

If you are carrying credit card debt and considering filing for bankruptcy, it’s a good idea to look at all of your options, as well as your own long-term goals. For help understanding all potential impacts, contact our office today.

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