Collection Calls Got You Thinking Of Filing Credit Card Bankruptcy?

If you have ever had to go through or have taken a debt management course, you know that unsecured credit, typically in the form of credit cards, is the most dangerous form of all credit. Why is this? We are receiving a card without having to place any money down or pledge anything as collateral. Based on our history of debt payment and our financial situation, we are given a limit to which we can spend on the card.

Though we are reviewed for eligibility when we apply for a card, this is based on whether or not we are proven able to pay back the debt and whether we will, based on our history with debt repayment. What if life is going great, we’re up to date on all our bills, and we suddenly lose our job? Unemployment compensation rarely ever amounts to as much as we were earning previously, so how to we repay the credit card debts we racked up while life was good? We may be able to manage for a while paying the minimums and taking card advances in order to pay other bills, but eventually these cards get maxed out. Once this happens, the collection calls typically come through because we are no longer able to make the monthly minimums. Day in and day out, we are harassed about when and how we are going to pay back what we have racked up. This is when many people consider filing credit card bankruptcy.

Naturally filing credit card bankruptcy will stop all of the bothersome calls and nagging collection attempts, but what many people don’t realize is that this should only be viewed as a last resort option. Though it is a given right that we are able to file for protection under the law, filing for insolvency really only should be done when one is facing such a dire situation that they are struggling for survival. Filing credit card bankruptcy is the easier way out of financial distress, but after one files a petition in court, they have a ‘black spot’ of sorts on their credit for years following- and this can’t be erased.

When the situation gets to the point where you are thinking about filing for credit card bankruptcy, it is wise to consult a professional first before you decide what to do. Of course it is best to start researching your options before things are in dire straits, but sometimes we don’t see the forest for the trees and can’t see the hardship on the horizon. Regardless how deep in debt an individual is, seeking a free consultation is advised. This could be a free initial meeting with a bankruptcy lawyer, a no cost debt analysis by a debt management company or a meeting with a financial planner.

It is possible that one can avoid having to file credit card bankruptcy if they act soon enough. Any professional who deals with debt, finances or even bankruptcy can analyze one’s financial situation and provide a plan of attack in order to recover. Though the answer may be to file for credit card bankruptcy, there’s a good chance that this isn’t the case, as there are other ways with which to handle the debt. Without being educated on all of the solutions and really understanding their personal situation in its entirety, one may make an unwise decision regarding the best path to take.