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Chapter 7 not the only way to handle credit card debt

According to recent reports, Americans collectively owe more than $1 trillion in credit card debt. The average household in Kentucky carries a balance amounting to thousands of dollars, leaving some families in financial crisis. Thankfully, there are a variety of ways to handle the challenge of credit card debt, from consolidation to Chapter 7 bankruptcy. 

Credit card debt is so difficult to handle because of typically interest rates. The rate can be higher than rates for student loans, auto loans and mortgages combined. This makes it extremely difficult to pay down without some kind of plan in place. One such option is debt consolidation. 

Consolidation refers to the process of combining all credit balances into a single loan, most often a personal loan. Such loans typically need to be repaid in between two and seven years, and can range from $1,000 up to $100,000. Consolidating a loan can cut interest rates down considerably; depending on the borrower's credit score, loan rates can be as low as 5.47% -- a far cry from the 15 to 25% interest on a credit card. 

Consolidating a loan is a helpful tool in handling credit card debt, but for some Kentucky families, this simply is not in the cards. For these households, a Chapter 7 bankruptcy filing may be the most financially responsible decision to make. Filing for bankruptcy includes liquidating assets to pay down existing debt, as well as a careful accounting of unsecured debt that may be eligible for discharge by the court. The best place to start is by consulting with an attorney experienced in bankruptcy law and debt consolidation.

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Law Office of Ginger C. Cord, PSC
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Lexington, KY 40507

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