Falling into a spiral of debt is something that can happen to just about anyone. As many New York residents are likely aware, credit card companies often make it very easy to purchase goods that one may not otherwise be able to afford. While this ease of purchase can sometimes be beneficial to consumers, it can also be a debt trap. When someone falls into a cycle of debt, escaping can seem incredibly difficult, if not impossible. Thankfully, there are options.
Credit card debt is a misfortune that plagues many New York residents. In the U.S., credit card use is highly popular -- so popular, in fact, that a website recently reported that credit cards were used more than 26 billion times in 2012. This is the last year in which data was available. In total, credit card transactions in the U.S. added up to $2.5 trillion.
And just as credit card use is common in the U.S., so is credit card debt. The National Foundation for Credit Counseling claims that 39 percent of credit card carriers are mired in more than $8,000 in debt. For the many who struggle with debt, it can seem hopeless. Even after contacting a credit card company and asking them to lower the interest rates on a credit card, it may still not be enough. Sometimes, fairly drastic measures are necessary in order to eradicate debt.
Bankruptcy is one such measure. By filing for bankruptcy, debtors can often erase some, if not all, of their outstanding credit card debt. By doing so, they are often afforded an opportunity to begin rebuilding credit. With bankruptcy, there are a number of avenues one can pursue -- Chapter 7 and Chapter 13 are popular options -- and it is often important to be expertly informed before making any decisions.
Source: CBS Boston, "Too Much Debt Will Sink You," Dee Lee, April 17, 2014