How to pay off your credit card debts using debt management program

If you are looking for a non-stop, high-speed highway to financial ruin, you are likely to find it with the help of credit cards. One of the more common reasons that many people end up filing for bankruptcy is due to accumulating too much credit card debt. Credit cards are so appealing to people like you and me because they offer the ability to buy what you want now. You can then pay it off “someday” (and we all hope that “someday never comes”, as the song says), using very small and affordable monthly payments. Visa, MasterCard and other issuers offer a way for us to make big, beautiful purchases that we might not enjoy any other way.

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And, as if we were kings and queens, it seems like nothing is beyond our financial grasp. Really? The low minimum payments seem reasonable, and easy to fulfill. That is one of the main issues associated with credit cards. It is easy to forget about the high rate of interest that you are paying; instead you get caught up by the low minimum payments and keep making more purchases.

It is possible to pay the minimum for years, accumulating credit card debt, until one day something happens. The credit card issuer may raise your interest rate or minimum payment. Perhaps you lose your job. Maybe some unexpected medical or natural catastrophe occurs, costing you a great deal of money. Suddenly, your minimum payments don’t seem as affordable as they once did. After looking at your situation, it dawns on your how much credit card debt you have. Bankruptcy suddenly becomes attractive, as you think that it might be the only way out.

Douglas Hoyes, a bankruptcy trustee who has seen more than his share of desperate victims of their own misuse of credit cards, points out that many people filing for bankruptcy or a consumer proposal have just under $20,000 in credit card debt at the time of filing. That is a rather large wake-up call for many people. It also illustrates the rather unfortunate effect that even the best credit cards can have on one’s finances. Many people just go along, living with their debts, until something happens to put them in a unexpected financial situation. With their credit cards maxed out, and quite often no emergency fund, there is no way to meet their financial obligations. Filing for bankruptcy seems like the best option.

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Avoiding Credit Card Debt

If you want to reduce your chances of filing bankruptcy, it is a good idea to avoid building up credit card debt in the first place. Canadian bankruptcy can hurt your credit score, and cause other financial issues. On top of that, the debt strain can begin to take its toll on your relationships.

You can work toward avoiding bankruptcy by creating a budget and living within your means. You should pay off your credit cards each month, refusing to carry a balance. You should also build up an emergency fund so that you are not at the mercy of an unexpected financial situation, and you have some cash to draw on.

With the right planning, you can be prepared so that you stay out of debt and avoid bankruptcy. Use credit cards wisely, and they are a very effective tool. But stay away from their darker side.