Unexpected events happen all the time for Colorado residents. Whether it is a medical emergency or something more mundane like car problems that must be brought in to the shop to fix, individuals are constantly confronted with incidents that demand their time, and money.
No matter if it is a one-time expense that comes out of nowhere, or a series of events that add up to a significant expense over time, these incidents can wreak havoc on a person's bank account. Accordingly, it is easy for individuals to turn to other means for paying off these bills, including credit cards.
While credit cards may seem like a manageable way of paying off the bills in the short term, the person must still pay off his or her credit card balances. This can be even more difficult to do than paying off the initial bill, because the sky high interest rates that apply to credit card debt mean the person ends up paying off a far higher amount than the original bill itself.
In addition, even if the person can manage the minimum payments on the credit card, other unexpected events will inevitably occur that may cause the person to use the card even more. At a certain point, the person will reach his or her limit on the card, at which point the person may need to turn to other options to discharge credit card debt they have accumulated.
In these cases where credit card debt becomes too unmanageable to handle, individuals have the option of filing for bankruptcy. Chapter 7 bankruptcy, for example, can prove to be an effective way of discharging credit card debt, along with other kinds of debt carried by the person. After filing the petition and going through the bankruptcy procedure, courts will typically discharge a person's unsecured debt, like credit card bills, which means the person is no longer legally responsible for paying off the debt. Other types of debt like medical bills can also be discharged, which can be vital to those who are simply unable to afford the debt that has accumulated through no fault of their own because of unexpected events.
Source: USA Today, "A credit card is not an emergency fund," Lindsay Konsko, Nov. 8, 2014