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Common Concerns & Questions About Bankruptcy

Credit card debt can get worse after job loss

| Oct 16, 2019 | Uncategorized |

From a relatively young age, you may have known what career path you wanted to take. You may have gone to the Texas college of your dreams to earn a quality education and later applied for a position that you thought would help you reach your career goals. After you got the job, you may have felt that everything was looking up.

Though you held the same position for years, you now feel that your life is completely off track because you lost your job. No matter the reason behind your unemployment, you now face a serious predicament, especially when it comes to handling your financial affairs. In hopes of handling this unexpected ordeal, you may want to closely assess your credit card debt.

Debt can get worse

After being laid off or otherwise losing your job, your debt could easily become overwhelming. If you have pre-existing credit card debt, you may want to contact the companies that hold your accounts and determine whether they have hardship programs. These programs are designed to help individuals facing financial difficulties. Some may allow you to temporarily lower your interest rate or lower your minimum monthly payment to a more manageable amount. Of course, not all credit card companies offer these programs.

Because debt can become so much worse when you are not generating an income, it is often best to avoid using credit cards altogether if possible. It may prevent you from creating higher balances that you may not be able to pay off. Still, you may find yourself in a predicament where using credit cards is necessary to meet your needs.

How can you handle it?

If your credit card company does offer a hardship program, follow the guidelines for the program as best as possible. Continuing to make payments, even a smaller amount, could help you maintain some control over the debt. However, if you reach a point where you cannot make any type of credit card payment, remember that it could be detrimental to your credit overall and result in penalty fees.

If job loss results in you facing financial burdens that you cannot handle on your own, you may want to look into Chapter 7 bankruptcy. This option has helped numerous people address their debt issues, and gaining information on this debt relief method may help you determine whether it is right for you.