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DIFFICULT financial times brought on by the pandemic are bringing struggling consumers over the edge. Arrears and balances on defaulting credit cards are increasing again. In the face of layoffs and tough economic times, many people are turning to their credit cards to pay for basic living expenses like food and housing. Lots of people are turning to their credit cards, hoping it’s just a temporary fix “until things get better.” The bad news is that credit cards come with a hefty price tag — the sky-high interest rates, not to mention late fees and over-the-limit fees.

Once 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 those so-called “payday” or “emergency” loans that are ten to thirty times worse than credit cards! In most cases, interest rates on these loans can range anywhere from 390% to 900% APR if you continue to roll over the loan (ie request an extension of the payment period)!!! Can you belive 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 comes! The “loan sharks” often prey on people who have bad credit and are already heavily indebted.

When you’re struggling with debt, you may find it harder to catch up each month. If some of your accounts have been turned over to debt collectors, that’s even worse, as it means you could always be sued by your creditors. Once they receive a judgment, creditors can garnish your wages or charge your bank accounts. Some people become paralyzed with fear and do nothing in the hope that creditors will simply give up by ignoring their debt problems. get real You cannot ignore your debt problems. If you do nothing, you will one day find 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 file for bankruptcy as a last resort? Bankruptcy can often be an option for many people who can no longer afford to pay off their debts. In Chapter 7, credit card debt, personal loans, medical bills, and most types of unsecured debt can be wiped out. That means you can start fresh and build your credit back up instead of having all of your delinquent debts reported to the credit bureaus every month. Your fresh start begins the day your bankruptcy proceedings are filed and creditors can no longer collect from you. Perhaps for the first time in a very long time you can finally breathe and feel like a human being.

If you can pay a certain amount each month, you may also qualify for Chapter 13 debt consolidation to significantly reduce your monthly debt payments. In most cases, credit card payments can be reduced to half (or even less) of what you currently pay. You’ll also pay 0% interest on your credit cards and can become debt-free between 3 and 5 years, depending on how long your Chapter 13 plan lasts. If you’re in foreclosure, Chapter 13 can also help you save your home and get your payments up to speed.

If you are 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 phone consultations to anyone who needs help managing their debt issues.

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None of the information contained herein is intended as legal advice for any particular situation. atty Ray Bulaon has successfully helped over 5,000 clients get out of debt. For a free legal evaluation of your situation, please call RJB Law Offices at 1-866-477-7772 TOLL FREE.

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