Major credit card debt can build over time. For New Jersey residents who are confronted with this issue and the inevitable problems associated with it, it is important to understand the potential solutions that a Chapter 13 bankruptcy may provide. Before filing, there are common missteps that contribute to the accruing of debt.
There are strategies people think can be effective to clear their credit card debt, but tend to fail. For some, there is a misplaced belief that the intermittent skipping of payments will help. This does little more than damage the credit score, raise the interest owed and accumulate late fees. Some people might make the minimum payment each month. While this satisfies the basic requirement, it does not impact the debt.
If possible, debtors can make extra credit card payments in addition to the monthly amount they are obligated to pay. Many fail to do this and the debt does not reduce as much as it otherwise would. Some debtors who have enough financial wiggle room to make a lump sum payment on their credit card decide to spend that money in other ways. However, making a lump payment might be beneficial to clear the debt over a shorter period.
Finally, when there is an opportunity to consolidate debt through a personal loan, it can be a useful tactic to have a single payment each month. The interest rate might be lower than what was being paid on the combined credit cards. These historically successful alternatives aside, they might not be available to many debtors. One step that can end the worry and fear that accompanies overwhelming debt is a Chapter 13 bankruptcy. To learn the benefits of Chapter 13 and to file, it may help to consult with an experienced bankruptcy attorney.