Bankruptcy and Credit Card Debt

Written by jessica Alba

credit-card-debt Bankruptcy and credit card debt often go hand in hand. It is so easy to pull out that little piece of plastic at the store. You can miraculously afford to buy groceries before payday. Of course, that new outfit will sure look good, when you where it to work tomorrow. The car is just about running on empty. No problem.

Wrong! Big problem! Unfortunately, most people do not count the cost of buying on credit, until the deed is done and the bill comes in the mail. Ouch! Now what?

How does bankruptcy and credit card debt happen?

Sometimes, it happens gradually. Maybe you are really careful about using the credit card. But, then the car breaks down, and you simply do not have the cash to pay for the parts and labor to get up and running again. Necessity may cause you to pull out the magic plastic. But, the result is still the same.

At the end of the month, when the minimum payment is due, you simply do not have the money. The problem is compounded for many people because they have several credit cards that are maxed out, or at least getting close.

Sadly, once you get into major credit card debt, bankruptcy is often the end result. You can never get ahead. For every payment you try to make, the card company takes on an extremely high interest rate and fees. Sometimes, your minimum payment is barely more than the extra money they tack on to the next bill. Add a couple of unexpected expenses and you are on your way to a bankruptcy lawyer.

An easy mark

However, before you beat yourself up for making poor financial decisions, remember that our society exists on the principle of instant gratification. Knowing this, banks and credit card companies actually seek out an easy mark.

Think about it. When do most people get inundated with offers for a credit card with 0% financing for 6-12 months? Of course! It is the college student! Why? The majority of college students are always broke. Even if Mom and Dad are footing the tuition and fees, they need spending money.

Then, there are the many students who have to work their way through school, or they are the non-traditional student that is trying to take care of a family, while getting the education needed for a good career in a flailing economy. Money is tight.

But, as a student, one of the first things to change is the mail in the box. A student may get 5 or 10 offers for “pre-approved” credit cards every month. Companies make it so easy! Sign here. The card comes in the mail, and all of a sudden, you are not struggling through school anymore. Yeah! Well, at least until the bills start arriving in the mail. Then, it gets worse. Soon, the free financing period is gone and then the balance really piles up. Ouch!

After Bankruptcy

While it seems stupid to target people that need the money the most, yet have the least ability to pay it back, credit card companies go one step further that really seems unconscionable. Be warned! If you have hit rock bottom, and are going to have to claim bankruptcy, you will soon be an easy target.

Sound stupid? Of course, it does! You have cut up all your credit cards. You credit score is in the toilet. You file for bankruptcy, so you can have a fresh start. You have vowed to turn over a new leaf to start making good financial choices. You are even going to classes, in order to learn how to control finances and not let them control you any longer.

The next thing you know, you mailbox will be filled with a bunch of credit card offers. No kidding! Credit card companies can look up your credit history. They know that most, if not all, of your major debt has been wiped out. You have a clean slate. You are an easy mark.

If you are not in debt any longer, you will now have the money to pay a new credit card bill. Who knows why credit card companies go to these lengths. In some cases, it is like giving a recovering alcoholic a bottle of fine wine for Christmas. It does not make any sense. They know the temptation to spend beyond your means is going to be too great for many people. Maybe they believe it is worth the risk. After all, they will make big bucks off the interest alone, before the card holder defaults.

So, now you can see how bankruptcy and credit card debt is so prevalent in society. If you have found yourself on the verge of filing bankruptcy, you are not alone. In fact, if your credit cards are the major cause of your financial trouble, know that millions of people are in the same boat. If you have not had to contact a bankruptcy lawyer yet, cut up those cards now. If you have already filed and have a fresh start, do not even open those envelopes full of temptation. Put them through the shredder.

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How does bankruptcy and credit card debt happen?

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