If you are dealing with credit card debt, you may feel overwhelmed with no idea how to start your path toward financial relief. To help you achieve financial freedom, our bankruptcy attorneys have put together a few tips to help you reduce credit card debt:

Tip 1: Make a plan to pay off your credit card balances.

First, you must stop making additional charges on cards that you already cannot pay. Next, take all your credit card bills and stack them in order from the highest interest rate card to the lowest interest rate card and add all the minimum monthly payments together.  Next, review your budget and figure out how much more money you can pay toward getting control of your credit card debt and add that to the minimum monthly payments.  

Let’s say, for example, you have now a total of $1000.00 you can pay toward your credit cards which is $100.00 more than the total of all the minimum monthly payments on all of your credit cards.  You pay that highest interest rate credit card the minimum payment plus that extra $100.00 that month and pay all your other creditors the minimum monthly payment.  The next month you do the same thing but after you make all the minimum monthly payments you will have something more than $100.00 to add to that credit card with the highest interest rate.  Hopefully soon you will have that highest monthly interest rate paid off in full, but you keep paying at least that $1000.00 per month to your credit cards. Eventually your cards will be paid off in full.  

Some people need to see results quickly to stay on track.  Those people may benefit from paying off the smallest balance credit card bill first so now they have for example, only 9 credit cards to pay as opposed to 10 that they originally had.  However, the first method ends up costing you the least amount of money so chose that method if you can. 

Tip 2: Take On Additional Work

If the stress of paying off credit card debt has become overwhelming, taking on additional work to put specifically and solely toward your debt can be extremely helpful if you have the time. This will help you accelerate your debt payoff as you start to pay less interest on your outstanding balance.

Tip 3: File for Bankruptcy

Another option to get rid of credit card debt is to file for bankruptcy. If you know that you do not have enough income to make ends meet, Chapter 7 bankruptcy can help you wipe out your unsecured debt in months. If your income is too high or you have too many assets, however, you may have to file a Chapter 13 bankruptcy. In a Chapter 13, you pay your creditors according to a plan for a period of 3 to 5 years and often for less than the amount due.  If you have fallen behind on your mortgage payments or a car payment, you could possibly file a 13 and pay off all of those missed payments and keep your home or your vehicle.  The amount you must pay per month and the number of months you must pay your creditors will be determined in part by something called a “means test”.  

Contact the Law Offices of Parnell, Michels & McKay

Nancy Michels and David Stamatis at the Law Offices of Parnell, Michels & McKay handles the two primary filing options for consumers under the bankruptcy code: Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Each option offers clients benefits under its protections, but specific requirements must be met under each Chapter. Bankruptcy protection can provide immediate relief and give clients a fresh start. A client can often stop a foreclosure or a repossession of an asset.  By filing bankruptcy, you can also stop creditor phone calls, lawsuits, attachments against your home, and other court actions. It is important that you understand the “in’s and out’s” of the Bankruptcy Code as many people make decisions along the way that turn out to be bad decisions because they just did not understand bankruptcy laws. Therefore, it is important to consult with a bankruptcy attorney sometimes long before you actually file a bankruptcy

At Parnell, Michels & McKay, we are sensitive to the often-overwhelming financial hardship that are caused by a bankruptcy. We are a caring, compassionate, and experienced team of legal professionals that can change the way you look at your financial life. Contact our office today and put our time-tested experience to use. Making the decision to file bankruptcy and which option should be selected is a decision that best made in partnership with your attorney.

NOTICE: Pursuant to § 528 of the Bankruptcy Code, our law firm is a debt relief agency. We help individuals file for bankruptcy relief under the Bankruptcy Code.

At Parnell, Michels & McKay we specialize in personal injury law such as motor vehicle accidents, falls, dog bites, workers compensation, social security disability, and other injuries. We also practice family law, including divorce, post-divorce, unwed custody and property division, and collaborative divorce. We have extensive experience in bankruptcy, probate, boundary disputes, estate planning, corporate formation and other real estate litigation.