Many of our Appleton readers probably know that there are many different options when it comes to dealing with a debt burden. A recent article told the story of how one Appleton couple, with a little help from a debt counseling program at Goodwill, was able to cut their credit card debt in half by accounting for their expenses and making a budget.
According to the recent article, the couple realized their debts were out of control when they found themselves in thousands of dollars of credit card debt and student loans. Then they saw a sign while reading their credit union’s newsletter about a debt counseling program at Goodwill Industries. Through the program, the couple has paid off half of their credit card debt and plan to completely pay them off by the end of the year. The program helped them to identify the holes in their pockets, which in their case were those small expenses that were not accounted for. Over time, those small expenses can add up and rob consumers of their financial security.
While developing a plan to pay off high interest credit card debt is sometimes a viable option for debt relief, in those cases where a financial crisis prohibits consumers from even making their minimum payments other options may also include bankruptcy. The goal of bankruptcy is to give consumers a fresh start by eliminating overwhelming credit card debts and allowing them to start over. There are several types of bankruptcies, but the most common for individuals are Chapter 7 and Chapter 13.
A Chapter 7 bankruptcy allows individual debtors to eliminate most unsecured debts, including credit card debt. In many cases, a debtor filing a Chapter 7 is still allowed to keep certain non-exempt properties, such as their home, depending on the equity in the home. A Chapter 13 bankruptcy allows individual debtors to repay their debt under a court approved plan for repayment, which sometimes reduces the amount owed and cuts interest rates to make the plan affordable for the debtor.
Filing bankruptcy is an important decision that should only be made after carefully accessing the individual or family financial situation and the ability to pay. Appleton consumers who find themselves in thousands of dollars in credit card debt do not have to feel stuck. There are several options for debt relief available.
Source: thenorthwestern.com, “Goodwill helps couple tackle financial crunch with program,” Danielle Beyer, March 19, 2013