Bankruptcy Options for Credit Card Debt – Finance Video

Credit Card payments falling behind

It’s possible to become into bankruptcy due to an outstanding credit card. The first step is a missed monthly payment to your credit card. Then, a late charge is added to your account each month. In the event of two missed payments, two consecutive months is the following step. This is the best time to consider reviewing your options regarding bankruptcy for the debt on your credit card . Credit card companies can increase the interest rate on your card under the Credit Card Act of 2009.

They can also increase the interest rates if:

1. Your credit rating declines.

2. Your card has been in your possession for more than one year.

3. Stimulating prime rates of interest

4. The initial promotional time comes to an close.

It’s common for those in default in their payments to have their interest rates increase up from 17.8 per cent to 30 per cent. However, the extent to that it rises varies. There is an unconstitutional law that prohibits corporations that offer credit cards raising their rates even more. If interest rates increase in the form of over-the-limit fees, tardy payments can add up to your credit card balance, which can lead to credit card debt to spiral. The collection companies will begin calling you when your minimum payment is not made. Thus, it’s advisable to look into bankruptcy options for debts incurred through credit cards.

Credit card debt collectors frequently pursue you with a lot of vigor. They may also employ an attorney to file lawsuits against your assets , and obtain rulings such as garnishing your earnings and putting liens against your homes. Insolvency filing can end any legal proceedings and also help with collection efforts. A “automatic stay”, as it’s known is a way to stop lenders from hiring bankruptcy attorney to initiate an action in court to recuperate the debt. That is certainly one of the benefits you get from declaring bankruptcy.

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