How to handle credit debt, including Chapter 7 bankruptcy

After the holiday season, many Americans will find themselves with credit card charges significantly racked up. This can lead to one of the most challenging forms of debt to pay off, and can sometimes have negative consequences to the consumer. Thankfully, there are a variety of strategies Alabama residents can use to handle credit card debt, from consolidation to counseling to Chapter 7 bankruptcy.

Breaking down the options

When debt is spread across multiple credit cards, a consumer often has two options. The first is to focus on paying down the highest-interest card first. The second is the so-called “snowball” method where the cards with the lowest interest rate are repaid first. In both cases, paying more than the minimum balance every month can help to speed up the process.

Developing smart spending habits can also be helpful, not just in paying down existing debt, but in avoiding racking up more at the same time. Reviewing spending to determine areas to cut back is a good start. Eliminating bills like unused gym memberships or unnecessary subscriptions to streaming services, for example, can help to free up cash flow throughout the month without contributing to credit debt.

Seeking help and support for these issues

Of course, for some Alabama residents, these tactics will not be enough to counter mounting debt. Thankfully, a Chapter 7 bankruptcy filing is an accessible way to handle consumer debt. Working with a trustee and a dedicated bankruptcy attorney, debts can be paid down or even forgiven in some circumstances, wiping the slate clean and helping return an individual or family to financial stability.