I’ve written about how some folks are drowning in debt. And, the methods one can employ to restructure one’s credit card bills. of course, that process means you will no longer have any credit cards at your disposal. (Unless you obtain what is called a secured credit card– where you provide $ 1000 deposit that “secures” your credit line of up to $ 1000. In essence, you can use a credit card only up to the amount of deposit you have with the bank or agency that issued your card.)
For those Americans who have come upon hard times, the choice to end their problems is almost always bankruptcy. Individuals who earn about the median for their area and can’t repay their debts can file Chapter 7. Assuming there is no lying or subterfuge in the application, one’s debts can be adjudicated and the taxpayer gets a clean slate. (Clean in that they owe no money- but they no longer have access to credit cards [for a few years, at least] and their credit history will reflect the bankruptcy.) Of course, one’s assets (over a certain value) are used to satisfy [that’s a legal term, you can bet the credits are NOT satisfied not receiving all that they owe) the creditors’ demands.
Most folks who file bankruptcy end up doing so because they’ve incurred sky high medical bills. (The second most common cause is the loss of a job.) And, when you file bankruptcy, you are asking the court to approve a payment plan to settle your debt (ranging from pennies to quarters on the dollar)- or, dependent upon your income and assets, to completely rid you of debt. Of course, you now have a seven year to ten year scarlet letter on your credit history. And, most employers (unless and until this practice is outlawed) check your credit history before offering you that new job.