Most people survive by using credit cards. Unfortunately, credit cards charge up very high-interest rate somewhere nearly 25%. Ultimately you end up paying much more than your debt. In the long run, you end up in debt for a long period of time. Let’s say you owe $20,000 on your credit card bill. You will continue making a minimum payment over a 20-year period and end up paying nearly 5 times more than what you actually borrowed. With a monthly payment of $400, you will be able to clear your debt in 23 years! You also end up paying nearly $100,000 as interest on a $20,000 loan. Even if you increase the payment you still end up paying a lot of interest. Even if you double your payment to $800 you end up paying $8000 as interest over the same principal amount. Considering that this is a lot of money, most people are looking for better options to pay off their debts.
Despite increasing your monthly payment, you still end up paying a lot of interest on your credit card debts. Dallas based bankruptcy law firm Recovery Law Group lawyers suggest filing for bankruptcy under Chapter 13 as a viable option. Bankruptcy seems a good solution. Filing for chapter 13 results in the creation of a repayment plan, in which, you will make monthly payments to your bankruptcy trustee who would distribute it amongst your creditors in a pre-determined share. The payments continue to be made over a period of 3-5 years. After the end of your repayment plan, any unsecured debts such as credit card debts, personal loans, and medical bills are discharged.
During chapter 13 bankruptcy, for a debt of $20,000, your monthly payments come to $425. Thus, you end up paying a nominal amount of money ($25,500) towards your credit card debts over a 5-year period and end up saving nearly 15 years of your life. Though monthly payments do not go down, you end up saving nearly $85,000! Chapter 13 also helps for other loans like those for home or car. However, since filing for bankruptcy is a matter of grave concern it is important to consult a bankruptcy attorney before making any decision. In case you are looking for a bankruptcy attorney to consult for your case, call 888-297-6023.