Many people assume that only people with low incomes struggle with financial problems. However, the truth and reality is that anyone can find himself in financial trouble if something unexpected occurs or if he lives above his means. The availability of credit cards have increased the risk of ballooning debt that becomes unmanageable because it gives people access to money at nearly all times. Due to the ease of obtaining credit cards, many people use them to finance a range of things, including businesses, which can lead to some significant levels of credit card debt.
The New York Conflicts of Interest Board recently released disclosure forms completed by members of New York’s City Council. The disclosure forms reveal that many of the City Council members have high levels of credit card debt. One Councilman, for example, has six cards with balances ranging from approximately $5,000 up to nearly $44,000. He noted that a large portion of the debt resulted from a business loan. Spokespersons for the City Council members indicated that most, if not all, members are paying the debt as agreed upon and are working to pay down the debt.
These facts and figures related to the credit card debt of prominent, often higher-earning, individuals reveal that the more average segments of New York citizens are not alone in their struggles with credit card debt. Many people use credit cards to cover unexpected expenses that result from medical bills, property damage, or other emergencies. Many other people use credit cards to make purchases they are fully able to afford, only to subsequently suffer job loss or a debilitating illness that leaves them suddenly unable to pay their bills and make minimum payments.
Credit card debt is often extremely stressful for people, in part due to creditor harassment. Fortunately, many people have an option that they may be overlooking. There are several different kinds of bankruptcy, including Chapters 7 & 13, which can provide a range of benefits for people struggling under severe debt burdens, including relief from creditor harassment. In some cases, the debt can be completely discharged, while in others a consumer can create a repayment plan that lasts between three to five years to clear the debt.
Source: New York Observer, “City Council Members Rack Up Credit Card Debt,” Jillian Jorgensen, July 16, 2014