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Some people think that they are doing a good job with their credit card by only paying the minimum each month. While it’s true that this will keep a person current each month, it also means that a debtor will pay the maximum amount of interest possible. If they are able, a debtor should pay as much as possible towards a credit card in order to minimize these interest charges. As a bankruptcy lawyer, it is easy for a person who is only making minimum payments on their credit card to fall into serious debt trouble.
For instance, if a person has a $5,000 credit card balance, their minimum payment each month is 1% of their balance plus interest. Their minimum payment in the first month is $125. Assuming they only made the minimum payment each month, it would take them 273 months to pay off their card. In total, they would pay $6,923 in interest.
If a person could pay slightly more each month, paying $135 every month, they will save substantial amounts of money and time. In this case, with the same information above, paying $135 ever month would take a person 55 months to pay off their card with interest charges of $2,353.22. Just an extra $10 a month in the beginning can save a person more than $4,000. Use this calculator to learn about your particular credit card debt and how long it may take you to pay it off.
This shows just how easy it can be to fall into debt problems. A person might think they are doing alright by making their minimum payments without realizing just how much it is costing them. Suddenly, an unexpected illness or job loss happens and they have no extra money. When this happens, a bankruptcy lawyer can help get your debt problems under control and help with get your life back.
At Westbrook Law Group, we have helped many clients discharge debt in Chapter 7 or reorganize debt under Chapter 13. We will find the right solution for your debt problems that can help you keep important assets while getting your debt under control. To learn more about how we can help with your debt issues, contact a bankruptcy lawyer at Westbrook Law Group today for a free consultation.