Some Arkansas consumers may have joined millions of others in spending more than they intended to over the holidays. Unfortunately, spending may lead to more debts and more bills. January is typically the month when consumers start strategizing on how to pay their credit card debt. Out of desperation, some consumers resort to digging into their emergency funds or life insurance to pay credit card debt.
While some people are able to draw up a budget and stick to it, many fail at budgeting. Consumers are commonly advised to start paying off the credit card with the highest interest rate, following with the next highest, but this could take time while day-to-day living expenses continue. They may be facing foreclosure or wage garnishments long before getting credit card debts under control.
The pressure of facing an out-of-control debt load day and night could be overwhelming. Consumers may want to consider obtaining information about the protection Chapter 7 bankruptcy offers. One may be eligible to have some debts discharged in bankruptcy. Bankruptcy protects consumers against foreclosure, garnishments, repossessions and creditor harassment. In addition, some debts will be discharged, including credit card debt.
Arkansas consumers may choose to file for Chapter 7 bankruptcy in order to start with a clean slate. During the time of the bankruptcy proceedings, all the valuable advice on how to get out of debt can be used as debt management in an effort to avoid the spiral of credit card debt in the future. As an alternative, Chapter 13 bankruptcy may be considered. This will allow a consumer to continue paying debts, according to a three- to five-year repayment plan. Such a plan will have to be approved by the court, and if all scheduled payments are made, the remaining balances may be discharged at the end of the repayment period.
Source: ktvn.com, “Remedies for a Financial Holiday Hangover“, Erin Breen, Jan. 6, 2015