As we have talked about on our blog, credit card debt is often a driver for people who file for bankruptcy. Debt can easily spin out of control if people rely on credit cards for everyday expenses; high interest rates, fees and penalties can turn what might start out as a reasonable amount of debt and turn it into something unmanageable. Many people in this situation might turn to Chapter 7 or Chapter 13 bankruptcy in order to emerge from their struggles with debt.
For many observers, it might seem as though people who have large amounts of credit card debt have gotten in that position due to poor financial skills. While that might be part of the equation, it does not tell the whole story.
In many cases, a given household’s credit card debt increases because one of the breadwinners has experienced unemployment. In fact, a recent report found that, over the last three years, a family where someone had been out of work for at least two months were 14 percent likelier to have credit card debt than were families that did not have any stretches of unemployment.
This extends to people who experienced underemployment — people who had jobs but weren’t getting enough work — as well. About 40 percent of households with credit card debt said that this was true for them.
Having large amounts of debt doesn’t have to be shameful, but it can have a real impact on a family and their future. Experienced bankruptcy attorneys can help guide a family to determine what their best options for eliminating their debt might be.
Source: ThinkProgress, “No, People Don’t Get Buried In Credit Card Debt Because They’re Bad With Money,” Bryce Covert, May 10, 2014