The TOUGH financial times caused by the pandemic are pushing consumers to the limit. Chargebacks and overdue credit card balances are on the rise again. In the face of layoffs and economic hardship, many people are resorting to using their credit cards to pay for basic expenses such as food and housing. Many people dip into their credit card hoping it’s just a temporary fix “until things get better”. The bad news is that credit cards come with a hefty price tag – sky-high interest rates, not to mention late fees and overlimit fees.
Once the credit cards run out, some people resort to even more desperate measures just to make ends meet. Lately, I’ve seen a lot of people go so far as to get some of these so-called “payday” or “emergency” loans, which are ten to thirty times worse than credit cards! In most cases, interest rates on these loans can range from 390% to 900% APR if you continue to “roll over” the loan (i.e. ask for an extension of the payment term)! !! Can you believe that? I have seen clients have 2, 3 or sometimes more payday loans at the same time. No wonder these people are broke before payday even arrives! Loan sharks often prey on people with bad credit who are already over-indebted.
If you’re struggling with debt, you may find it harder and harder to catch up each month. If some of your accounts have been turned over to collections, that’s even worse because it means you can be sued by your creditors at any time. Once they have obtained a judgment, creditors can then garnish your wages or debit your bank accounts. Some people are paralyzed with fear and do nothing, hoping that somehow, by ignoring their debt problems, creditors will just give up. Be real. You cannot ignore your debt problems. If you do nothing, you will realize one of these days that your inaction has only made your debt problems worse.
If you’ve done everything you can but nothing has worked so far, should you declare bankruptcy as a last resort? Bankruptcy can often be an option for many people who can no longer afford to pay their debts. In Chapter 7, credit card debt, personal loans, medical bills, and most types of unsecured debt can be erased. This means you can start over and rebuild your credit instead of having all of your overdue debt reported to the credit bureaus each month. Your fresh start begins the day your bankruptcy case is filed and creditors can no longer collect from you. For the first time perhaps in a very long time, you can finally breathe and feel like a human again.
If you are able to pay a certain amount each month, you may also qualify for Chapter 13 debt consolidation to significantly lower your monthly payments. In most cases, credit card payments can be reduced to half (or even less) of what you are currently paying. You also pay 0% interest on your credit cards and can get out of debt for 3 to 5 years, depending on the length of your Chapter 13 plan. If you’re in foreclosure, Chapter 13 can also help save your home. and update your payments.
If you’re in debt and need to find the best solution for your situation, call toll-free 1-866-477-7772 to schedule a free consultation.
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NOTE: Due to the COVID-19 pandemic, I am offering free consultations OVER THE PHONE to anyone who needs help dealing with their debt issues.
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None of the information contained herein is intended to provide legal advice for any specific situation. Atti. Ray Bulaon has successfully helped over 5,000 clients get out of debt. For a free evaluation of your situation by an attorney, please call RJB Law Firms toll-free at 1-866-477-7772.