Once again, the holiday season is approaching and American businesses are gearing up their advertising campaigns, as well as store displays, to get in on the action. Every year, many Americans find themselves burdened into oblivion during the Christmas season. Creditors make more credit available during this time so they can capitalize on this spending frenzy. Most people just think they can cash it out and pay it later. The only problem is that most Americans are already in debt so far, if added to their balances, it could push them over the edge to file for bankruptcy.
While Christmas is the season of joy, the side that most people don’t talk about is the dark side. When people have credit available, many of them will use what they cannot afford to have one more good vacation and then buckle up and be debt free. This process is nothing more than kicking the can down the road as Americans spend themselves in bankruptcy. The average American at the end of 2011 had $ 16,000 in credit card debt. I’m sure this number is much higher this season. While $ 16,000 doesn’t sound like a lot of money, in the last 10 years the average American income is around $ 35,000 a year. When the debt of this group increases, their income decreases each year. This is creating a New Years Eve cocktail for disaster.
As another year approaches, Americans traditionally spend this time of year counting their blessings and sharing with their friends and family by giving. It is noble for people to express their love through gifts, but not when it comes at such a high cost. Looking at the big picture, we must remember what is really important and that it is the thought that counts, not the price of a gift.
After Christmas, most people who overspend will have credit guilt when their bills arrive in the mail. As 2012 wraps up, we’ll usher in 2013 with many New Year’s resolutions for great ideas to get out of debt. For some people, filing for bankruptcy may not only be their only option, but the best option. Filing for Chapter 7 bankruptcy is prepared for this type of debt. In Chapter 7 bankruptcy, all unsecured debt is erased in the bankruptcy liquidation. The only thing the consumer needs to worry about is not looking like they had an explosive Christmas with the intention of filing for bankruptcy right after. A bankruptcy attorney would likely make the person wait to file, so it is not perceived as fraud.
This is an area that should be discussed with a bankruptcy attorney. Typically, a bankruptcy attorney will tell the debtor to stop collecting 90 days before filing while continuing to make payments in good faith. Using a credit card up to the date of filing for bankruptcy could result in the creditor filing some charges against the debtor. There is nothing wrong with filing for bankruptcy, but it must be done with honesty and integrity.