If You Cannot Pay, Bankruptcy IS NOT the First or the Best Option

In the  above video an Arizona attorney discusses Credit Card Debt In Chapter 13 Bankruptcy.  In it he covers the reality of paying old credit card debt as part of the payment plan that Chapter 13 requires.

With the 2005 bankruptcy law changes consumers in Chapter 13 could still be paying old credit card debt.

When the established media run articles on credit card debt relief, they cover budgeting, cost cutting, debt settlement, debt counseling, and bankruptcy. These articles are either written by or quote consumer financial experts and/or attorneys.  According to these experts, the only solution for consumers, who cannot pay their credit card debt IS repayment is bankruptcy.

credit card debt relief without hurting creditConfronted with the options of bankruptcy or pay the monthly credit card debt, too many consumers, who really cannot pay, sacrifice monthly necessities, even mortgage payments, to pay their unsecured credit card debt. That is because they have been brainwashed by self-serving financial experts and attorneys.  Attorneys have one solution to debt that cannot be repaid.  That would be bankruptcy.  Financial experts would not dare risk their reputation by publicly recommending that consumers who cannot pay all their debts skip their monthly credit card bills.

An attorney writing for a local New Jersey newspaper website first wisely suggests that people with credit card debt problems avoid falling victim to scam companies who guarantee to “erase debt for pennies on the dollar.”  But then, she goes on to offer the typical safe (for her) establishment solutions. The first two assume the consumer can afford to make payments.

  • Contact the credit card company: to work out a modified payment plan.
  • Contact a credit counselor to learn Credit Card 101 budgeting.
  • Consider bankruptcy: She even recommends Chapter 13 bankruptcy, advising you will not lose your mortgaged home if you have a stable income. However, if you file a Chapter 7, you might lose your assets.  Since the Bankruptcy Reform Act of 2005, if you file Chapter 13 and you have a stable income, you will be subject to a five year payment plan for some unsecured debts including credit cards.  Most states have Homestead Acts that protect a homeowner’s equity during bankruptcy. But, she knows that.

Credit Card Debt Relief

Then, there are the debt relief options of debt management, settlement, consolidation, or negotiation which all have you making payments you cannot afford to make because you need to pay for monthly necessities.

Unemployment, medical catastrophe, student loans, divorce, death in the family — many people have legitimate reasons for not being able to pay their credit card debts. Credit card indebted consumers, who learn how to properly resist debt collectors and collection attorneys in writing, will fare better by simply not paying their credit card bills rather than seeking the legal protection of bankruptcy to do the same thing.  There will be less damage to their credit and no permanent bankruptcy mark on their credit report.  Bankruptcy should be the last resort, not the first.

I had $63,000 in credit card that I could not afford to make the monthly minimum payments on. I have been there. I have experienced your emotions; your fear, your guilt, your anxiety and your feelings of uncertainty and lack of control.  Non-payment without bankruptcy is the way out.     Read more of my pages and postings on this site and consider acquiring in my educational materials.

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