With the way that the world economy has fallen over recent times, many more people are finding themselves in a financial mess that is very hard to get out of. Sometimes this can turn even worse when they have to give up their homes or businesses due to mounting pressure. If the inevitable happens, it may be a good idea to contact a bankruptcy lawyer for some advice, or even a debt relief expert, to find a way through the tough times ahead.
Many people start off with good intentions and would never like to think that they will end up with nothing. However, they do tend to compound their problems by running up huge bills and then try to pay them off by taking out other credit cards. This kind of financial juggling is a dangerous game indeed and many have been caught out when the companies call in their collectors to get their money back.
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Indeed, credit card companies have a lot to answer for since they practically give them away to anyone who is interested. They have no idea if the person is able to pay back what they borrow, nor do they have any conscience about it either. All they are interested in is getting their sometimes extortionate interest rates paid over long periods with no thought as to what the person is going through.
Some people have been advised to file for Chapter 7 when the majority of the bills are credit card related. The government realized that a big problem was looming on the horizon once the economic downturn started. They also wanted to rein in those companies who gave up credit cards too easily. The end result was Chapter 7 and Chapter 13 which stopped anyone taking the homes away from people over outstanding amounts which should not have been allowed in the first place.
What happens is that the case goes to court and the debtor has to undergo some means testing to see if they are living beyond their income. Although demeaning, the court can decide that if there is no excess income over reasonable expenditure then the amount owed to the credit card company is wiped off there and then.
On the other hand, if there is some excess, then all the amounts owed are amalgamated and a payment plan is worked out where each company will get a small amount each month for a certain period. This may sound simplistic but the one good thing is that harassment of the debtor stops as soon as the court becomes involved in the case. No excess credit charges or penalties can be added after this, neither will the debtor receive phone calls or letters anymore.
This was all brought about to give people some time to recover after the economies around the world crashed. Because homes could be taken away from people, the government stepped in because, ultimately, it would be them who would have to keep people afloat if they were out in the street with nowhere to live.
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