For some, bankruptcy really is the best and most effective option for discharging credit card debt. It allows you to start over, almost like hitting “reset” on a video game. One drawback to consider is that the bankruptcy rules that were put in place by the credit card lobby during the Bush administration can force a lot of middle class workers to file Chapter 13 (reorganization where you pay back the debt from future earnings) instead of Chapter 7 (liquidation where the debts are wiped out completely). Congress is currently working on laws to change this.
Smart credit card companies know this. That’s why it’s sometimes possible to get them to drastically lower your interest rate simply by explaining to them that you want to repay your debt but unless the current terms are modified, you see no alternative but to declare bankruptcy. You may have to stay on the phone for three or four hours, and keep escalating from supervisor to supervisor, but at the end of the day, you have a very, very good chance of going from 30% interest to 13%.
If you are emotionally exhausted, want to start over, and are willing to go through the process of bankruptcy, seek out a highly regarded, qualified bankruptcy attorney in your area. They can explain the drawbacks, costs, benefits, and process to you. In many cases, it’s better to just start over and begin rebuilding your life.
