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Archive for the ‘Credit Card Debt’ Category

Strategies to Avoid Credit Card Debt

July 17th, 2015 at 10:13 am

Texas bankruptcy attorney, Texas chapter 7 lawyer, Texas chapter 13 attorney,Credit can be a helpful tool when a person faces unexpected financial hardship, but it is also a major contributor to many Americans’ debts. The convenience of credit and bonus offers from credit card companies motivate many consumers to spend out of their budget.

By understanding how to manage credit cards responsibly, it is possible to avoid the stress and uncertainty that come with insurmountable debt. Read on to learn three strategies to avoid credit card debt.

Keep Diligent Records of What You Spend

Online shopping has made it particularly easy to overindulge with credit cards. People can spend thousands with the click of a few buttons.

According to the Federal Trade Commission, one of the best ways to avoid serious debt from online spending with credit is to keep a record of purchases. This will help you understand how much credit spending is affecting your finances.

Do Not Spend More than Half of Your Credit Card Limit

As a general rule, you should never spend more than half of your credit limit. This will ensure that you have credit available in a financial emergency. It can also prevent compulsive spending.

When Dealing with Debt Collection Efforts, Always Keep a Record

Collection agencies love to harass debtors who have outstanding balances. They often call debtors several times each day to request payments.

Even if you are in collections, it is important to understand that you still have rights. There are laws that limit the strategies collection agencies can use to recover payments. Be sure to keeping a record of your communications with debt collectors to protect your rights.

If outstanding credit card debt has become too much for you to handle, call an experienced San Antonio bankruptcy attorney. At the Law Offices of Chance M. McGhee, we can evaluate your situation and create a debt-relief plan. This may involve chapter 7 or 13 bankruptcy, or a bankruptcy alternative. To get started, call our office today at 210-342-3400 for a free initial consultation.

Credit Card Debt: Can I Keep My Credit Cards When Filing for Bankruptcy?

May 29th, 2015 at 6:26 am

Texas bankruptcy attorney, Texas Chapter 7 lawyer, Texas Chapter 13 lawyer,Most debtors face similar personal and emotional conflicts. The uncertainty that comes with insurmountable debt can cause immense stress, and many Americans feel overwhelmed with the complexities of financial recovery. Although many debtors share these concerns, each case is unique.

There are many causes of debt—from medical bills to a sudden loss of employment. One of the most common sources is credit card debt. With high interest rates and the convenience of credit, these cards land many Americans in financial turmoil. This article will shed some light on credit card debt and address some of the associated concerns.

Three Factors Determine If Your Credit Card Accounts Will Close Due to Bankruptcy

All bankruptcy filers must provide a complete record of their debts. This includes credit card debt.

At some point during the bankruptcy process, your creditors will receive a notification of your declaration of bankruptcy. Credit card companies can choose to cancel your cards after receiving this information. In most cases, creditors will consider three main factors when making the decision to close an account or to leave it open:

  1.       The total debt owed;
  2.       The type of bankruptcy filed;
  3.       And the account holder’s credit score.

Although you must report all debts, you do not have to report credit card accounts with a zero balance. However, the trustee may require you to relinquish your credit cards.

Bankruptcy Appears on Your Credit History

Even if a creditor does not receive a notification of your bankruptcy, the information will still appear on your credit report. As a result, all of your credit card providers have access to this information. Upon review of your credit report, the creditor may choose to cancel the account.

Consult a Bankruptcy Attorney for Helpful Insight

Because each bankruptcy case is unique, an assessment from an experienced San Antonio bankruptcy attorney may prove invaluable. An attorney can provide useful insight and help you avoid making mistakes during the bankruptcy process. If you would like to speak with a bankruptcy lawyer, contact the Law Offices of Chance M. McGhee at 210-342-3400.

A Brief Guide to Managing Credit Card Debt

January 16th, 2015 at 11:26 am

managing credit card debt, San Antonio bankruptcy lawyerAlthough most Americans have some form of debt, many could have avoided financial hardship by responsibly managing credit cards. Having funds instantly available is a great convenience, but overspending can put a person in a world of trouble.

Minimizing expenses is the first step for getting debt under control. Then, develop a budget that incorporates personal income, assets, and expenses. This can be a difficult task, which is why you should consider consulting a financial advisor or an attorney. If the debt amount is too great to pay off in a reasonable time period, consider discussing the situation with a bankruptcy lawyer.

Reasons and Alternatives to Canceling Credit Cards

According to one source, the most common reason for a person to close a credit card account is to achieve greater financial control. However, closing an account can actually harm your credit score.

There are a number of effective alternatives to closing a credit card account; one of the most common is to contact the creditor to renegotiate a new interest rate. If possible, it is best to keep an account open as its age will factor heavily into one’s credit score.

How to Cancel a Credit Card the Right Way

If canceling a credit card seems to be the only viable solution, be sure to do it in a way that minimizes the impact on your credit score. The most important fact to keep in mind is that canceling a credit card does not make the debt go away; the amount will simply transfer to a collections agency.

In order to avoid collections, cancel the card after paying the balance in full. Also, consider opening a low-interest credit card soon after the cancellation. This may prevent your credit score from lowering.

If you are dealing with crushing amounts of debt from credit cards, loans, or medical bills, bankruptcy could be the answer. To speak with an experienced San Antonio bankruptcy attorney, contact the Law Offices of Chance M. McGhee at 210-342-3400 to schedule a free consultation.

How to Deal with the Debt of a Deceased Family Member in Texas

January 9th, 2015 at 9:22 am

debt of a deceased family member, San Antonio bankruptcy lawyerA death in the family is always a difficult time for loved ones. Add to that the financial costs of a funeral, and times of mourning can become even more challenging.

If the deceased has debt, it is important to know if relatives are responsible for paying creditors. When a person leaves behind debt from credit cards and other sources, it may be wise to contact a bankruptcy attorney for guidance.

No two debt cases are alike. If the debt was from an account that a living relative owned, the debt will be theirs to pay regardless of the situation. Debt from joint accounts and co-signed loans may also transfer to living relatives.

Selling Off Assets

When a person dies, it is common to sell assets to pay for debts. In some cases, though, the value of the deceased’s assets is not enough to cover the debt. In these cases, it may be wise to consult a bankruptcy attorney to discuss the options.

Talking with Creditors

In many cases, it makes sense to have an honest and open conversation with the deceased’s creditors about the situation. Some creditors may choose to reduce the amount owed—depending on the value of the debt—in the event that the debtor passes away.

Dealing with Debt in Texas

The process of paying off a deceased relative’s debt in Texas may seem complicated—and in many cases, it is. Community property law stipulates that relatives may have to pay the debt of a deceased family member.

It is important to remember that every situation is unique. For this reason, the guidance of a family attorney may prove invaluable.

If you are struggling to pay debt and would like to discuss your situation with a lawyer, contact the Law Offices of Chance M. McGhee at 210-342-3400. Mr. McGhee is an experienced San Antonio bankruptcy attorney, and he may be able to help you reach financial stability and end harassment from creditors. Call us today for a free initial consultation.

Understanding the Different Forms of Debt

December 16th, 2014 at 11:06 am

Texas forms of debt, San Antonio bankruptcy lawyerMany Americans are aware different types of debt exist, but may not know some forms of debt are more manageable than others. The type of debt also can affect an individual’s options when trying to file bankruptcy.

According to Investor Place, the average American citizen carries $225,000 or more in debt. This accounts for America’s total debt in credit cards, mortgages, and various loans, as well average interest rates and the percentage of citizens with more than $500 put away in a savings account.

Credit Card Debt

Debt from credit cards is incredibly common. As an unsecured form of debt, banks and lenders consider an individual’s credit score when determining eligibility for credit cards and their credit limits. Unfortunately, high interest rates can make credit card debt escalate quicker than most people realize. Also, having too much debt on a card—even if the card has not reached its limit—can reflect poorly on one’s credit score.

The key to managing credit card debt is to keep balances about halfway below the spending limit and to meet or exceed each monthly payment. This will go a long way toward building good credit, making an individual appear reliable.

Debt from Loans

There are a variety of loans available to the average consumer. Auto loans, business loans, and mortgages are some of the most common.

If you are struggling to keep up with high amounts of debt from credit cards, loans, or a combination of both, bankruptcy might be a viable option. As an experienced and trustworthy Texas bankruptcy attorney, Chance M. McGhee is ready to help those struggling under crushing amounts of debt. He has been refining his understanding of bankruptcy law for the past 20 years. Contact the San Antonio Law Offices of Chance M. McGhee today at 210-342-3400 for a free consultation.

Federal Rules Debt Collectors Must Follow

November 27th, 2014 at 1:00 pm

debt collectors in San Antonio, Texas bankruptcy lawyerWhen a person owes a defaulted amount on an account, such as a credit card or prior utility bill, the company who the original debt is owed to will often “charge off” that debt after a certain period of time has gone by. Someone who is struggling with overwhelming debt may have multiple accounts which have been declared charge offs by the original creditor.

There are certain guidelines a creditor must follow before they can charge off an account. If the account is an installment loan (such as an auto loan or mortgage), then the delinquency must be at least 120 days past due. If the account is a revolving credit account (such as a credit card), then the delinquency must be at least 180 days past due.

At this point, the creditor has three options for debt collection for the account. The company can continue to pursue collection themselves; they can hire a third-party collection agency to continue collection activity; or they can sell the debt to a debt buying company. Debt buying companies purchase debt portfolio from creditors and any funds then collected on the debt belong to the debt buyer.

Regardless of what option a creditor decides on, there are federal rules that have been established that a debt collector must follow. These rules were established under the Fair Debt Collection Practices Act (FDCPA) and include:

  • A debt collector must sent a written notice within five days of the first initial telephone contact which validates the amount of the debt owed;
  • Debt collection may only take place between the hours of 8:00 a.m. and 9:00 p.m.;
  • A debt collector may not contact a person at their workplace if they have been told either orally or in writing not to do so;
  • A debt collector must stop contacting a person if the person sends a certified letter to the debt collection telling them to stop all contact. The only exception to that contact would be the debt collector acknowledging the no-contact letter and/or contacting the person to let them know they will be filing a lawsuit or other activity;
  • If a person is represented by an attorney, then the debt collector must contact the attorney and not the person who owes the debt; or
  • Debt collectors may not harass, make threats, or make false statements in order to intimidate or scare a person into paying the debt.

If bankruptcy seems like a viable option for your financial situation, contact the Law Offices of Chance M. McGhee. San Antonio, Texas bankruptcy lawyer, Mr. McGhee has helped clients over the past 20 years regain control of their financial lives. Call the law firm at 210-342-3400.

Four Ways to Manage Credit Card Debt

October 21st, 2014 at 12:18 pm

credit card debt Texas, San Antonio bankruptcy lawyerCredit cards are a double-edged financial sword. Aside from their obvious benefits and functions, many banks offer points systems and other rewards for using their cards. Many Americans, however, are all too familiar with the possible risks associated with credit card use—especially when one falls behind on payments.

Nearly every American has a credit card–and likely more than one. According to TIME, the overall amount of debt incurred by Americans has actually been in decline. While this is great news for some, others are still facing the challenge of keeping up with payments, dealing with harassing creditor calls, and possibly even considering bankruptcy.

Solving debt problems is about active financial planning and making smart choices. Here are four helpful ways to regain control of credit card debt:

1. Make Monthly Payments, Meeting or Exceeding the Minimum Payment

What is the most basic solution to solving debt? Paying it off. Unfortunately, resolving debt is not always that simple. Debtors should make every effort to organize their finances and make sure enough money is available to meet those credit card payments every month. Late payments result in penalties and harm an overall credit score.

While purchasing an expensive item and only having to pay a small amount each month is alluring, making only minimum payments is not always the best choice. If possible, it is always a great idea to try to pay more than the minimum—sometimes twice as much.

Aim for minimum payments, and try to exceed them when possible.

2. Focus on High-Interest Debt

It is often surprising to many Americans how quickly credit card interest can add up. This is why it is so important to prioritize payments for cards with the highest interest.

By paying off high-interest cards first and continuing to make minimum payments on the low-interest ones, overall debt levels become much easier to control.

3. Limit Credit Card Use and Spend Wisely

Depending on one’s financial and living situation, this may be difficult. When attempting to solve a serious financial problem, limiting credit card use while paying them off is critical for lowering overall debt. Again, many people rely on their credit cards for day-to-day living, so this can be a challenge.

Try to pay for items with cash first. Only use credit cards for necessities.

4. Save Money

This is another challenge for those in debt, but is important. While every attempt should be made to pay down credit cards, savings should not be neglected; this is key to establishing long-term monetary stability. After paying off high-interest cards, not having any cash saved away can often cause the debt to come back as the credit cards become an easy way to make purchases.

Prioritize paying off debt, but be conscious about the necessity of saving money.

If your credit card debt has become too much to handle, we may have a solution. Bankruptcy, for many Americans, is not only a way out of debt but is also a path to financial success and independence. As an experienced San Antonio, Texas bankruptcy attorney, Chance M. McGhee has helped clients for the past 20 years solve their financial challenges. Call the Law Offices of Chance M. McGhee today at 210-342-3400 for a free consultation.

Warning Signs of Financial Trouble

September 24th, 2014 at 7:30 am

Bankruptcy Financial TroubleAll of us struggle with finances at one time or another. However, for many people, that struggle may become overwhelming and feel as if it is never-ending. For those people, bankruptcy can often be the first step to gain control over their financial future.

There are certain signs that financial advisors point to as red flags that your debt has become unmanageable and bankruptcy should be considered. These signs include:

  • The balance of your credit card debt continues to increase, yet your monthly income is either staying the same or has decreased;
  • You pay only the minimum amount due on your credit cards. Some months, you pay even less than the minimum or completely miss the payment;
  • You have multiple credit cards and they all have balances on them;
  • When you receive an offer for a new credit card, you immediately apply;
  • You are using credit cards to pay credit card bills. If you have applied for a credit card, only to take cash advances in order to pay other credit card bills, that is a definite red flag to serious financial trouble;
  • You are close to or at the limit on most or all of your credit cards;
  • You are charging more each month on your cards than you are sending in for your monthly payment;
  • You are using your cards to purchase food, gas, utility bills and other life necessities;
  • Your credit cards are no longer used for ‘extras’ or for convenience sake. Instead, you are using them because you do not have any money;
  • The phone is ringing and letters piling up in your mailbox about your late bill payments;
  • You do not know the true amount of what your total credit card debt is, and you do not want to know.

If you recognize your situation in this list, then it may be time to consult with an experienced San Antonio bankruptcy attorney. Find out what your best options may be to help and get you back on the road to financial recovery.

New Study Explores American Credit Card Debt

May 19th, 2014 at 7:00 am

 bankruptcy is Texas, credit card debt, high interest rates, San Antonio bankruptcy lawyer, large credit card debt, middle income debt, middle income American households, national survey, DemosWhen you hear someone say that they have tens of thousands of dollars of credit card debt, the first thought is often that the person is a  frivolous spender. You may envision luxury cars and closets full of Louboutin shoes.

However, based on a report recently released by Demos, that is not the case. The conducted national survey was focused on low and middle-income American households. These two groups were divided based on key pieces of statistical milestones, and main difference between the two was that one group carried credit card debt while the other did not.

It was found that there were three main factors that contributed to the credit card debt.

  •         Households that did not have health insurance used their credit cards for their medical needs. They were 20 percent more likely to have credit card debt;
  •         Households that have children under the age of 18 were 14 percent more likely to carry credit card debt than those that did not have any children;
  •         Households that had an unemployed person for more than two months were also 14 percent more likely to carry credit card debt as opposed to those where joblessness was not an issue.

The report basically states that credit cards are being used as a “plastic safety net” for things that were necessary to sustain the household. So contrary to popular belief, Americans carrying large credit card debt are not actually being irresponsible. In fact, they are merely using the resources that are available to them, even if those resources come with high interest rates.

In cases like this, it becomes harder and harder to recover once the debt starts to get out of control. If you find yourself in a spiral of debt that you have no way of paying, bankruptcy can definitely be an option. Contact a Texas bankruptcy attorney today to discuss your options to getting a fresh start.

Mythbusters: Common Credit Card Misconceptions

May 12th, 2014 at 7:00 am

credit card debt, credit card misconceptions, credit card myths, Credit Report, debt in bankruptcy, debt settlement, San Antonio bankruptcy attorney, Texas bankruptcy attorneyOne of the reasons why people find themselves trapped by debt is because they have a misunderstanding about a few key issues regarding credit card debt. These credit card misconceptions or myths can set an individual up for failure by leading that person to believe he or she can tackle credit card debt easily. For some cases, the only real solution is to wipe out the debt in bankruptcy.

Many people think that any person can get credit card balances cut in half without too much effort. This is not necessarily true because credit card companies screen clients to make sure that the claimed hardship actually meets company-wide understanding requirements. Not every individual is going to be able to slice their debt in half.

Another common myth or credit card misconception is the idea that going through debt settlement will improve your credit situation and cause less damage than bankruptcy. Many debt settlement providers require a lump sum payment. If you are not able to pay it, you could get slammed on your credit score.

If you are scraping by, making minimum payments right now, it is also highly unlikely that you will be able come up with a lump sum payment to make debt settlement worth it. The majority of companies will report such a settlement to your credit report, thus doing just as much damage as bankruptcy. For those in financial peril, it does not really make sense to struggle just to come up with the payment for the debt settlement when what is really needed is a completely fresh start.

You do have options if you find yourself unable to deal with mounting debt. If you are feeling the pressure, set up a meeting with an attorney to walk through your options before committing. Find the best solution for you. Contact a Texas bankruptcy attorney today to begin your personal consultation.

Call today for a FREE Consultation

210-342-3400

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