If you cannot pay your credit card bills as promised, you have several options to find debt relief, according to the Florida Attorney General. Failure to pay your credit card bills can lead to disastrous financial consequences, including lawsuits and credit rating damage. Whether you can renegotiate your debts or must file bankruptcy depends upon the severity of your financial situation.
Financial Management Tips
You can sometimes get yourself out of credit card debt with discipline, notes the Florida Attorney General. Stop charging up your cards and pay as much as you can each month. You should pay higher-interest debts first. In some cases, a certified credit counselor can help you rearrange your budget so you get out of debt while taking care of your basic needs.
Debt Management Plans
Nonprofit organizations such as the Consumer Credit Counseling Service of West Florida offer debt management plans. Be careful how much you pay for this service, warns the Florida Attorney General. Credit counselors usually charge about $20 per month for debt management services. You pay the fee plus a lump sum payment that is distributed to your creditors. A good credit counselor can renegotiate the terms of your credit card debt. You cannot get any new credit while participating in a debt management plan.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to completely eliminate your obligations to pay existing credit card debts and similar bills. But you must qualify to file. As of 2011, single Florida residents earning less than $40,029 per year could automatically file for Chapter 7, according to the U.S. Trustee Program. The income guideline for a couple was $50,130, while the annual figure for a family of four was $65,135. If you earn more money, you can request Chapter 7 relief only if you prove you cannot reasonably repay your creditors while supporting your financial dependents.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows you to partially repay your credit card debts under court supervision; it usually takes three to five years to complete Chapter 13, according to the book "How to File for Chapter 7 Bankruptcy." If you have lived in Florida for at least two years, you can keep all of your primary residence real estate equity and up to $1,000 in motor vehicle value regardless of your bankruptcy status, according to Bankruptcy Action. But you risk losing some assets such as stocks and cash on hand and cannot use any bankruptcy to eliminate child support, alimony, court fines or recent tax bills.
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