Happy New Year Everybody! Mark my words, 2012 is the year to de-leverage. That is, 2012 is the year to remove high-interest, unsecured debt from your personal balance sheet.
There are three ways to remove credit card debt from your personal balance sheet. I have set them forth below. If you are unsure what option is best for you, then contact a law firm like ours that will consult with you at no charge to help your understand the best way forward. Here are your options:
1. Pay your credit card debts in full. If you have the means to do this, do it. It gets you the best result. But don’t fool yourself into thinking that making the minimum monthly payment is the way to accomplish this objective. On average, it takes at least 99 months to eliminate credit card debt by making the minimum payment shown in your current statement. Yup, that’s more than eight years.
2. File a “fresh start” bankruptcy. If you are burdened by credit card debt, can’t afford the minimum payment, have few assets, and have a relatively low income, you can get a fresh start in bankruptcy court, eliminate all of your debts and move on with your life. Beware, however, that you must “qualify” for a fresh start in bankruptcy nowadays. And you can only get a fresh start every eight years.
3. Debt workout. If you can’t eliminate your credit card debt by paying it in full this year and fresh start bankruptcy isn’t an option or isn’t an attractive option, engage a law firm to represent you and negotiate for large reductions in your credit card debts without the need for bankruptcy.
Whatever option you find is best for you, remember that not choosing an option is choosing to continue to pay exorbitant interest on large balances for the next eight years. And that is a terrible choice for you and your family. Make this year different: get credit card debt out of your life.
Kevin Fallon McCarthy
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