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SHOULD YOU FILE BANKRUPTCY BECAUSE YOU CAN’T PAY YOUR CREDIT CARD BILLS?
Disclaimer: We are not qualified legal or tax professionals and are not giving advice. Always speak with a qualified professional before making any legal or financial decisions.
Americans collectively have $1 trillion in revolving debt balances – most of that is credit card debt. If you are one of the millions of Americans with credit card debt, know that you are not alone. It might not help, but misery does love company!
If you are having trouble paying your credit card bills, you are probably looking for a solution. Bankruptcy might seem like a great option. You might get your debt wiped out and be able to start over again.
Before you decide on bankruptcy, check out your options very carefully. Bankruptcy has some serious consequences.
Is Bankruptcy an Option?
There are two forms of consumer bankruptcy. Chapter 7 is designed for people who absolutely can not pay their bills. You must pass a means test and earn under your state median income for your family size. Chapter 13 is for people with a steady source of income and specific amounts of unsecured and secured debt.
For some people, bankruptcy is the only option. If you owe more than you can realistically pay off, you may need to seriously consider bankruptcy.
Bankruptcy can provide immediate debt relief and puts an immediate stop to the harassment. In some cases, all of the unsecured debt is forgiven, and you get a “clean slate.”
Pros of Bankruptcy
- Stops Bill Collections – No more collection calls and letters.
- Eliminates Credit Card Debt – Depending on the BK you file, all your debts could get wiped away.
- Allows the opportunity to start rebuilding your credit – Enjoy a fresh financial start!
Cons of Bankruptcy
- Damaging to your Credit – Your credit rating takes a hit after you file a bankruptcy. It stays on your credit report for 7-10 years depending on the type of bankruptcy that was filed.
- Cost of Filing and Lawyers – Bankruptcy can be expensive. There are filing fees, and lawyers can cost thousands of dollars. Make sure to check all your options carefully.
- Physical and Mental Drain – Until your bankruptcy is finalized, you’ll still get creditors’ harassing phone calls and threatening legal letters. Many people agonize over the stigma of bankruptcy.
- New Credit and Loans – Your credit will probably take a severe hit. You will, at some point, need to start rebuilding your credit. It’s very difficult to get approved for new loans with a bankruptcy on your credit history.
If bankruptcy appears to be your only option, you may be a candidate for debt settlement. Pacific Debt may be able to help you avoid bankruptcy while getting out of debt.
For more information on debt settlement, talk with one of our debt professionals.
Is Debt Settlement a better option than Bankruptcy?
Debt settlement is a last resort to filing a bankruptcy. First, what is debt settlement? In debt settlement, you negotiate with your creditor to agree on a reduced balance. Pacific Debt is one of the leading debt settlement companies in the United States. We will negotiate with your creditors while helping you learn to live debt free.
Pacific Debt can help you if:
- Have more than $10,000 in unsecured debt (generally credit card debt)
- Live in a state where we do business
- You are having difficulties making minimum payments
Pacific Debt is not for you if:
- You want ONLY to improve your credit score
- You ONLY want lower interest rates
- You can make more than minimum payments and have a good credit score
Is debt settlement a better option than bankruptcy? It depends on your unique situation but here are some points to take into consideration.
- Do you only make minimum payments on your credit cards?
- Do you use credit cards to pay for necessities?
- Are you using one credit card to pay off another?
- Are bill collectors calling or creditors suing you?
- Are you in danger of foreclosure?
- Are you thinking of withdrawing 401K monies to pay your debt?
- Have you lost your job?
- Do you have a lot of medical bills?
- Are you getting a divorce?
If you answer yes to any of these, you may be a candidate for debt settlement.
For more information on debt settlement,
talk with one of our debt professionals.
Who Can Help me with Debt Settlement?
Pacific Debt is a Debt Relief Provider with over 15 years of experience. Pacific Debt offers debt relief solutions tailored to your unique situation and budget. Our certified counselors help you work up a budget and explain your options to you
- Accredited by the Better Business Bureau with an A+ Rating
- Rated 4.5/5 stars by ConsumerAffairs.com (over 450 verified reviews)
- Rated 5/5 stars by TrustPilot based (over 400 verified consumer reviews)
- US News and Report – named Pacific Debt as One of the Best Debt Settlement Companies of 2018
Pacific Debt has helped thousands of people reduce their debt. We have settled over $250 million in debt for our clients since 2002. Contact us to see how we can help you.
How do I get started and how long will it take?
Once you make the decision to get out of debt, you apply through our website. You’ll be connected with a certified debt relief specialist who will review all your options. If debt settlement is right for you, we move forward on getting you enrolled.
If it is not, we refer you to one of our Trusted Partners who can help you with other options.
As you enter our debt settlement program, your certified debt relief counselor will analyze your debt, monthly expenses, and your income. They look at your current budget and determine a payment estimate that works for you. They then work with your creditors to agree on a lesser amount of debt and a repayment schedule. An Account Manager will be with you every step of the way.
For more information, talk with one of our debt specialists today.
References
https://www.cardrates.com/advice/credit-card-debt-statistics/
https://www.debt.org/bankruptcy/should-i-file/
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*Disclaimer:
Pacific Debt Relief explicitly states that it is not a credit repair organization, and its program does not aim to improve individuals' credit scores. The information provided here is intended solely for educational purposes, aiding consumers in making informed decisions regarding credit and debt matters. The content herein does not constitute legal or financial advice. Pacific Debt Relief strongly advises individuals to seek the counsel of qualified professionals before undertaking any legal or financial actions.
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*Clients who make all their monthly program deposits pay approximately 50% of their enrolled balance before fees, or 65% to 85% including fees, over 24 to 48 months (some programs lengths can go higher). Not all clients are able to complete our program for various reasons, including their ability to save sufficient funds. Our estimates are based on prior results, which will vary depending on your specific circumstances. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. We are not a credit repair firm nor do we offer credit repair services. Our service is not available in all states and our fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. We are licensed where we engage in business. NMLS # 1250953. The use of our services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S. 12-03825. Pacific Debt, Inc. is registered with the California DFPI under the CCFPL registration number 01-CCFPL-1250953-3419036.