As discussed previously in this blog, individuals can find themselves deep in debt seemingly out of nowhere. An unexpected job loss can strike the source of a person's income, leaving them unable to pay their monthly bills. Other times, tragedy can strike when a person has a medical emergency, which can leave the person with massive medical debt they are simply unable to pay.
While a person's filing for bankruptcy is commonly due to this sudden shock of debt, in many other instances, there is no sudden influx of debt. Rather, a person may find themselves deep in debt after several months or years of accumulating smaller amounts of debt.
This is often the case with credit card debt, which can slowly trickle until a person finds themselves with debt that is out of control. Indeed, according to one nonprofit group, credit card debt constituted the single highest category of debt in a recent student, dwarfing those who reported medical debt by 72 percent to 21 percent, respectively.
Fortunately, personal bankruptcy may be an effective option for those deep in credit card debt if other debt relief strategies fail. Different types of bankruptcy operate in a different manner, but the underlying focus of bankruptcy is to discharge a person's debt and allow the person to start anew. Unsecured debt like credit card debt is often at the top of the list for the debt that will be discharged in bankruptcy.
Individuals who have a great deal of credit card debt should thus consider whether bankruptcy might be an effective option for them. Whether through Chapter 7 or Chapter 13, individuals can find the debt relief they have been searching for, enabling them to move on with their lives.
Source: The Street, "Reasons for bankruptcies? They're not what you think," Brian O'Connell, Jan. 22, 2014