Minimum Payment Warning:
Most noteworthy by making only the minimum payment each period, you will pay more in interest. As a result it will take longer to pay off your balance.
Example: Making no additional charges using this card, and only paying the minimum payment of $35. You will pay off the balance shown on this statement in about 23 months. Paying an estimated total of $772!
This example is taken from my actual bill and it comes with a Warning! If that's not enough to shake you up, I don't know what will be.
In this example you pay off the Walmart card first. Pay the minimum amount on the Macy card, take the leftover money and pay it towards your Walmart balance. Things to keep in mind; Pay as much as you can pay over the minimum amount, pay it on time, you'll soon be crossing debt off your list.
Bankruptcy is a legal procedure involving a business or individual that cannot repay their outstanding debts. Bankruptcy offers a second chance to those deemed by the courts worthy of a fresh start. Also allowing creditors a chance to obtain some repayment based on the individual's or business' available liquid assets. Bankruptcy can essentially benefit the individual or business and the creditor alike. Individuals or businesses can receive a second chance to gain access to consumer credit and most importantly peace of mind having no more debt obligations. Creditors can also benefit because they will receive some debt repayment rather than none at all. There are a few types of bankruptcies available depending on the individual or business' financial situation:
- Chapter 7: Involves the liquidation of assets. Most common filed bankruptcies for individuals or business' that have few or no liquid assets. Allows individuals to dispose of their unsecured debt like credit cards, and medical bills. If there are nonexempt assets like stocks/bonds, second car/home, coin/stamp collections these items will be sold to help repay some or all of the debt. Exempt or necessary assets such as only house/car, clothing, and tools for a trade will not be taken to repay the unsecured debt.
- Chapter 11: Deals with company reorganization. The goal being to reorganize and become profitable again. This allows the company to operate normally while working on a debt payment plan. This is the rarest bankruptcy filed for.
- Chapter 13: Debt repayment with lowered payment plans. For individuals who make to much money to file for chapter 7 bankruptcy. Also allowing for individual's and business' to create manageable debt repayment plans. In exchange for repaying their the creditors the courts allow them to keep all of their property.
Before making this tough decision be sure to first compile all your financial records; debts, assets, expenses, income. Listing them together for a better idea of your situation. Next you will need to seek credit counseling within 180 days of filing for bankruptcy to show the courts you have exhausted all other measures. Lastly contact a debt specialist to get a second opinion making sure bankruptcy is right decision for you. Here are some statistics to keep in mind while making your decision.
Chapter 7 is the most popular form of bankruptcy, making up 63% of individual bankruptcy cases in 2015.
- Bankruptcy remains on your credit report for 7-10 years.
- Some experts believe it’s most beneficial when you have more than $15,000 in debts.
- Federal student loans, alimony/child support, debts that arise after bankruptcy is filed, some debts incurred in the six months prior to filing bankruptcy, taxes, loans obtained fraudulently, debts from personal injury while driving intoxicated are not covered under bankruptcy law.
- There were 844,495 bankruptcy cases filed in 2015, and 97% of them 819,760 were filed by individuals. The top 3 debts causing bankruptcies were mortgages, auto and student loans.
- In 2016, 95.5% of the 499,909 Chapter 7 bankruptcy cases were discharged. Meaning no debt was paid all was forgiven.
- Only 22,388 of these cases were dismissed. Meaning the judge or felt like the individual had enough resources to pay their debts.
Bankruptcy is a matter to take very seriously and may not be for beneficial for everyone. As you can see there are quite a few steps, statistics and options for filing for bankruptcy. Be sure to do your homework and ensure the process is done properly. Remember bankruptcy isn't the end of the world, but could be the beginning if done right . We all make mistakes. Bankruptcy is made available for those individuals or business' that have learned from their mistakes and our ready for a second chance.