There are usually multiple factors that contribute to a resident of Minneapolis or St. Paul, deciding to file for bankruptcy. Credit card debt is one of those factors. The reasons behind each person's credit card debt vary but may include the loss of a job or medical emergencies. While ideally, an individual will have savings set aside to cover several months of living expenses should a financial emergency arise, not everyone is able to accumulate that kind of money before it is needed. In these situations credit cards are often relied upon.
According to a recent national survey, it is not uncommon for individuals to carry more credit card debt than they have cash to cover. While 51 percent of those surveyed indicated they had the cash to pay credit card debt, close to 30 percent said there was not enough money in their emergency account. The remaining 17 percent did not did not have an emergency savings but they did not have credit card debt either.
When someone is facing large amounts of debt that they are unable to pay off, that person might decide to pursue either Chapter 7 or Chapter 13 bankruptcy. Which chapter is best will depend upon the circumstances of the person filing. A bankruptcy attorney is a good place to start. That individual can help determine which chapter one qualifies for as well as which would probably provide the best end result.
The bankruptcy process can be stressful but so too can living with what goes along with being unable to pay bills. In addition to resolving the debt issue, along the way a filing can address other matters such as creditor calls and foreclosure actions.
Source: CBS News, "Close to half of Americans have more credit card debt than savings," Constantine Von Hoffman, Feb. 18, 2014