Many people in New York are able to make their monthly credit card payments, even as they carry thousands of dollars in balances on the cards. Maybe they think that they will be in a better financial position to make a full effort to repay the debt later on down the line, perhaps after getting a salary increase or finding a better paying job. In the meantime, they continue to use credit cards for purchases and make every effort to make the minimum payments each month.
While making sure to pay at least the minimum payment each month is crucial in maintaining a semblance of a credible credit score, this isn’t really the best way to address credit card debt. The reality is that when New York residents “skim by” like this, they are taking a big risk. What happens if you run into financial challenges and all of the sudden you can’t even make the minimum payment? It won’t take long for your finances to get seriously mixed up.
At our law firm, we attempt to help our clients find debt solutions that will help them in the long-term. People who are maintaining high balances of revolving debt on multiple credit cards are paying hundreds, if not thousands of dollars in interest each year. That is money that is going straight into the profits of the credit card company – not toward paying down your balance.
Some New York residents may find that filing for bankruptcy is a better financial solution. A Chapter 7 bankruptcy, known as “liquidation” bankruptcy, can eliminate many types of debt, including credit card debt. Chapter 13 bankruptcy can allow a New York resident to establish a concrete plan for repaying debt.