Michigan consumers who are heading toward overwhelming credit card debt may find comfort in knowing that they are not alone. Many others are in the same position, and other people sharing their stories may help those in trouble. Valuable lessons can be learned from the errors made by others. While there are certainly some common mistakes that can lead to unmanageable debts, the area that seems to cause most concern is credit card debt.
One consumer who had been through the deep waters of overwhelming debt recently shared the errors he made, maybe not even realizing that many people make those same mistakes. He asserts that the most important lesson he learned was to examine the available options and never to hesitate to use the services of professionals to assist in making sensible choices. He described how he had started a business by maxing out two credit cards, but in hindsight, realized that a part-time job would have helped him with living expenses and enabled him to pay off the credit cards.
When he met the love of his life, they failed to discuss their individual financial habits and expectations and used a major investment of his wife’s to obtain a mortgage on a small property and pay off his credit card debt. However, they continued living off credit cards and, within 18 months, their credit card debt was up to $18,000 again. They sold their condo to settle the credit card debt and purchased another property, but they failed to change their habits and remained in a cycle of accumulating credit card debt, rolling it into their mortgage.
Although the financial errors of another could certainly provide valuable lessons, many Michigan consumers’ credit card debt may already be beyond salvage. However, they need not despair, as help is available through the protection of personal bankruptcy. While a Chapter 7 bankruptcy will liquidate some assets to pay creditors, it will discharge some unsecured debts — including credit card debt. Another option is Chapter 13, whereby consumers with a regular income may draft an extended payment plan for up to five years of repayments for the court’s approval. While payments such as mortgages will continue, the consumer will be protected against foreclosure, and experiencing financial freedom while moving forward can only be beneficial.
Source: durangoherald.com, “Warning: Don’t make the same mistakes I did“, Matt Kelly, July 22, 2014