Monday, January 9, 2012
Getting Nowhere - Minimum Payments and Credit Card Debt
Today I was reviewing a chapter 13 client's file. I noticed the disclosures given on their Bank of America credit card statements. It is truly depressing to see how long it would take for a consumer to pay off a small credit card balance by making the minimum payments. Here was the breakdown:
Client had a current balance of $5,011.61 on her Bank of America Visa card. Small, and manageable, right? Well, if this client is struggling, and can only manage the minimum payments it would take her 25 YEARS to pay this balance off. This is assuming that no further purchases are made on the card and she is only paying on it. What is even more depressing is to see that she would pay a total of over $14,000 of payments over the 25 years!!!
Now, this if for a small card. Many of our Oregon bankruptcy clients are carrying much larger balances and have several different credit cards. They are essentially a slave to the credit card companies by the time they come see us. Many see chapter 7 or chapter 13 bankruptcy as their best option to finally free themselves from such burdensome debt.
If you are caught up in the viscous cycle of credit card debt, or have other debt that is a problem it may be time to talk to a bankruptcy attorney.
For more information about bankruptcy in Oregon and SW Washington, visit www.pacificbankruptcy.com