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Helping good people through bad times

Size of credit card debt often alarms consumers in January

Like many Americans, Tennesseans rely on credit cards' convenience to pay for a wide variety of products and services. They may also use those cards more freely during the holidays, often without closely tracking how much they are spending. The problem has been made worse in recent years by the increase in online shopping, which usually requires a credit card.

Sometimes, the result of holiday shopping is enormous credit card debt for individual consumers. Many only become aware of the true size of their debt in January. For the country, total credit card debt has reached $800,000, an amount second only to the $1 trillion in student loan debt.

The best strategy to avoid such debt is to pay off the balance every time a statement comes in. Leaving any balance on the card account only adds interest, which quickly builds and can balloon an outstanding balance well beyond the amount originally owed.

Negotiating with creditors is one way to deal with credit card debt and to avoid harassment by collection agencies. Some creditors allow debtors to use a repayment plan or even pay less than the actual amount owed.

When debt has truly gotten out of hand, filing for bankruptcy protection is a perfectly acceptable way to settle credit card debts. All bankruptcy processes are supervised by federal courts, and debtors can choose the form that fits their situation. Chapters 7 and 13 - liquidation and reorganization, respectively - are the two most common types of protection offered by federal courts.

Before filing for bankruptcy protection, a debtor should speak with a qualified bankruptcy professional who knows and understands various debt-relief options. Debtors who are hesitant to use the bankruptcy process should note that it is one of the quickest ways to get out of debt.

Source:, "Debt hangover follows holiday fun," Tom Tobin, Dec. 24, 2013

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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