There are literally thousands of ways to get upside down in credit card debt — but you don’t have to let it bury you. This becomes exceptionally true when it comes to credit card lenders’ collection tactics.
The credit card industry is infamous for skirting or exceeding the boundaries of decency when it comes to collections, but you do not have to simply live with it. What kind of life is that, after all?
Using a Chapter 13 bankruptcy procedure, you can put an immediate stop to collections, which can help you take stock of your circumstances and create a reasonable plan for working your way out of the hole you are in.
Credit card lenders count on loss when they lend
Not all debts are equal in the eyes of the law, especially when it comes to Chapter 13 procedures. While procedure does halt collections, it doesn’t undo many of your debts. Rather, it helps you create a reasonable path out of from under your debt with a repayment plan.
Under the plan, a court will likely require that you prioritize your debts and repay many of them in full. Under this structure, secured debts such as a home or a car receive top priority, while the debtor must pay important debts such as child support or back taxes in full.
However, credit cards count as unsecured debt, because they are loans against no collateral. Under a Chapter 13 procedure, you may discharge a significant portion of the debt altogether.
If you have any concerns about the ethics of discharging credit card, please know that this is noble but unnecessary.
Credit card companies understand the risks of operating in the unsecured lending sector, and their entire business plan takes this possibility into account. This is, in part, how they justify such high rates of interest on the money they lend.
If you are able to discharge some or all of your credit card debt through bankruptcy, it is both legal and ethical. You are not cheating the system by doing so, you are operating well within the law’s established boundaries.
Chapter 13 creates a path forward
One of the greatest advantages of a Chapter 13 procedure is the structure it provides for those who owe to themselves to put their lives and finances back on track. Under Chapter 13, those who owe significant sums can use the law to pay back what they owe in a way that they can afford, and possibly do so without losing all of their assets.
If you are ready to consider a Chapter 13 procedure, do not hesitate to consult with an experienced attorney who can help you understand the nuances of the process and how your specific dilemma may benefit. With proper legal guidance, your rights can remain protected as you work to create a path forward to a fresh start and a new season of prosperity.