I have so many clients tell me “I’m not behind on any of my bills.” or “I’ve never missed a payment.” When I ask them why are they seeking bankruptcy advice, they say, I have run out of credit. Further questioning reveals they have been taking cash advances from one credit card to pay another. Worse, they have taken out a pay day loan to pay their credit card bills or a home equity loan.
The problem with all of this is the client is just taking on more debt, they are not getting rid of any debts. A person cannot solve their money problems by using credit card advances or using one credit card to pay for another.
In many cases, the client has used assets such as his 401k, IRA, or home equity to try and “get out of debt”. If they had consulted with a bankruptcy lawyer before taking on new debt, we might have been able to save those assets by filing a Chapter 13 Bankruptcy.
If you are struggling to pay your credit cards each month do the following:
- keep a journal or log of everything you spend
- determine how much money you bring home each month
- write out a complete list of your bills
After looking at your financial picture, if you do not have enough money every month after paying the bills they must pay-house, car, utilities, food, healthcare (not credit cards), you should call a bankruptcy attorney to discuss their options.
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