I was reading an article in the Dallas Morning News last week while there on a seminar for Chapter 13 Bankruptcy Trustees. It was sobering. Many personal stories of people trapped in a cycle of debt they are having a hard time escaping. One of the many points of the story was regarding how long it really takes you to get out of debt by just paying the minimum balance. Hypothetical situation was $10,000 in debt presuming a 14% interest rate (national average...many of my client's cards are much higher). Payment was set at interest due plus 1% of the balance to determine the minimum payment which apparently is standard as well. At that rate it takes 27 YEARS AND 9 MONTHS to pay off the $10K balance. That is phenomenal. The total payout is $21,166.00 which is more than 2x's the initial balance. Friends....obviously this is a good deal only for the bank. Do what you can to lower your interest rates and pay off your cards pronto!
If you've done what you can and still can't make it work consider bankruptcy as a viable option. A chapter 7 bankruptcy case can discharge or wipe out unsecured debt like this and if not available to you due to high income, too many non exempt assets, etc., a chapter 13 bankruptcy case will pay off all or part of the debt over a maximum 60 month period. A plan can often provide for payment of just pennies on the dollar for this kind of debt. Even if it was a full repayment plan due to the income available the interest stops dead as of the date of filing for credit card and other unsecured debt. There is hope and a way to manage all of this.
If you've got questions about bankruptcy we've got answers. Call us at 9952) 432-4388 or visit us on the web at http://www.kingsburylawoffice.com/.