The holiday are the time of the year when most families come together to eat, drink and be merry. Although such activities bring cheer to the occasion, they can translate into higher spending. Many people on Long Island, New York, unconsciously spend so they may be unaware their holiday spending habits could end in a pile of credit card debt.
According to a survey by dailyfinance.com, more than half of parents stated that they would buy gifts for their children with credit. That decision is one reason that in the United States, credit card debt had reached $800 billion, second only to $1 trillion owed for student loans.
But going in debt to finance the holiday season can be a burden, especially when it is greater than a person's income. At some point, a person may borrow money from relatives or friends, pawn personal property or apply for other loans. However, doing so can complicate the problem because it will mean additional payables.
Filing for bankruptcy may be an ideal solution to eliminate or reduce debt. But filing for insolvency with a Chapter 13 reorganization does not mean that all debts will be eliminated. Under reorganization, a person has to set up a repayment plan for a percentage of the money owed for three to five years, without having to sell relevant assets.
Before filing for bankruptcy, it is important to undergo financial counseling. This is to ensure that the debtor had exhausted other options, such as negotiating with creditors to remove interest. Nevertheless, if there is no other option, a person with a mountain of debt may consult a legal professional to assess the best debt relief option.
Source: Delaware Online, "Debt hangover follows holiday fun," Tom Tobin, Dec. 25, 2013