Many fail to have a plan to get out of credit card debt
According to a report from the Federal Reserve, revolving debt increased to $1.02 trillion in November 2017. While it may indicate confidence on behalf of Florida consumers and others, it may also indicate future problems as well. According to one study, 31 million Americans don’t think that they will have their credit card debt paid off by the time they die. An additional 33 percent of respondents to the YouGov study aren’t sure when they will get out of debt.
Credit card delinquency rates are currently at historic lows, which leads some to believe that there is little to worry about right now. However, those who are in credit card debt are encouraged to make a plan to pay it off. This may include creating a budget and getting a better sense of their overall financial situation. Creating a plan may allow individuals to cut spending and free up cash to pay down their balances faster.
Credit card balances may come with high interest rates that make it difficult to keep up with monthly payments. If payments are late or not made at all, fees and other charges may be applied. Those who don’t think that they can reduce their principal balance in a reasonable amount of time may want to think about filing for bankruptcy.
Filing for Chapter 13 bankruptcy may make it possible to reorganize debt and pay it off over three or five years. Those who own a home or car may be able to retain their property during the repayment period. This is because creditors are generally unable to stop foreclosure on property or take other collection actions. If there is a balance remaining on a debt after the repayment period ends, that balance may be discharged by a bankruptcy court.