Is Chapter 13 Bankruptcy the Right Way to Eliminate Credit Card Debt?
Credit card debt has overwhelmed many families in the United States. While credit cards are really only intended to be used in limited situations, they have become a way of life. People use their credit cards for many or all of their purchases, often with no way to pay those debts back. Until recently, credit card companies made it easy to raise credit limits and keep charging more and more to the same card.
This bubble has burst. Our country is now dealing with repercussions of excessive credit card borrowing. Unfortunately, most lenders have dealt with this by raising interest rates, lowering limits and sending consumers’ accounts into collections.
Chapter 13 bankruptcy is designed to help people who have a job and regularly make payments on their debt but are still in over their heads. It works by reorganizing your debt with the help of a federal bankruptcy court.
Chapter 13 bankruptcy isn’t just a good way to get rid of your credit card debts. It is a good way to keep your home, your car and all your possessions while getting rid of your debt.
In order to qualify for a Chapter 13 filing, you need to earn enough to make certain monthly payments. If you do not earn enough to make these payments, an Illinois Chapter 7 filing may be right for you. Chapter 7 quickly removes credit card debt, but sometimes requires the person filing to give up their home or other property.
When you reorganize your debt, all of your unsecured debts, such as credit card bills, medical bills and certain personal loans, are consolidated into one monthly payment. This payment is generally much lower than what you would normally be paying.
You will need to make this payment for three to five years, depending on your exact circumstances. At the same time, you will need to continue paying any mortgage payments and other secured debts.
At the end of your repayment period, most of your unsecured debts, including your credit card debts, will be discharged. Secured debts, such as your mortgage, and some tax debts will remain.
As soon as DebtStoppers files your bankruptcy, all collections and repossession activities will immediately stop. You will no longer deal with your creditors and banks directly. They must all go through the court to get paid. To schedule a free one-on-one debt analysis, contact DebtStoppers in Chicago today by calling 312-913-0630 or contacting us online.