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Is Bankruptcy Where Credit Cards Are Taking You?

 

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.

Credit card debt elimination

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.


A Bit Of Facts To Help People With Regards To Understanding Credit Card Debt Consolidation

Credit card debt consolidation is an option for those that find themselves with many monthly charge card payments to keep track of and payments that tie up a large portion of their available cash flow. Credit card debt help can be found through a variety of programs offered in locations throughout the US. These credit card debt help companies offer credit card account debt consolidation loans, credit counseling, and debt negotiation services. The debtor can feel safe in knowing that credit card account debt help is available, and resources are attainable.

Credit card debt consolidation loans are typically granted to homeowners in the form of a home equity loan. These types of charge card debt consolidation loans have a lower interest rate which in turn offers a lower monthly payment than other types of loans. Credit card debt help companies recommend a homeowner first look to a home equity loan before applying for other types of credit card debt consolidation loans. When debtors have only one monthly payment to make on a loan, they can pay the debt off much faster than trying to juggle multiple payments from multiple lenders.

Credit card debt consolidation loans can be made through traditional lenders such as banks and credit unions, or they can be made directly through charge card debt help organizations. These credit card account debt help organizations have limited funding, are usually non-profit, and supply their funds on a first come first serve basis. Swift action should be taken when applying for a credit card account debt consolidation loan through a charge card account debt help organization once the decision has been made. All credit card account debt consolidation loans require some form of credit card and debt counseling. Applying the methods learned in these counseling sessions will ensure that the borrower does not get into charge card account debt easily again.

Interest rates for charge card debt consolidation loans through traditional lenders are based on the borrower’s credit rating. This credit rating, if high, can allow a borrower to get a charge card debt consolidation loans at a lower APR. If the FICO score is low, credit card debt help companies recommend raising the FICO score before making application through a lender. Unfortunately, the most effective way to raise a credit rating is by paying down charge card debt. This is obviously not an option for those seeking a credit card account debt consolidation loan. Credit card debt help organizations will be able to offer alternative methods for raising an individual’s credit rating.

 


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