There are a lot of people in New Jersey who are struggling with credit card debt that they can no longer afford to make payments on. While many people think that consolidating all of their credit card debt in order to pay it off quickly is a better solution than filing for Chapter 7 bankruptcy, this alternative can actually end up costing a lot more money in the long term.
Having credit card debt consolidated into one monthly payment could provide a person with a solid plan for repaying all of their debt in a few years. However, if a person pays $500 each mont towards their credit card debts rather than contributing the same amount of money to a retirement fund, the repayment plan is effectively costing them hundreds of thousands of dollars in lost investment earnings.
Filing for personal bankruptcy usually costs around $1,500 and takes about 90 days to complete. Although these upfront costs may sound like a lot to some people, the long-term benefits for debtors and their family members can be invaluable. In essence, many people who file for Chapter 7 bankruptcy are choosing to repair their future finances rather than pay for their past financial mistakes in lost retirement income.
Before deciding the best way to resolve debt problems, those in this situation may want to talk about their financial situation with an attorney who has experience in bankruptcy matters. Legal counsel can explain to a client which debts will be eligible for discharge under Chapter 7 bankruptcy and whether filing is an appropriate form of debt relief.