Credit Card Debt

Credit card debt is a big issue for many in Wenatchee, Washington. The rising cost of living, increased interest rates, unexpected expenses, and financial hardships can all quickly turn what was once manageable debt into an overwhelming burden that you must claw your way out of.

If you are struggling to keep your head above water with minimum payments or are facing aggressive debt collectors, you must take the time to learn what legal options are available to you.

A Wenatchee bankruptcy attorney can walk you through all of them after assessing your financial situation to help you determine the right way forward.

Credit card debt can spiral out of control because of several common factors:

• High Interest Rates: Many credit cards have interest rates that exceed 20%, making it more difficult to pay off the principal balance.
• Minimum Payments: If you pay only the minimum, all this does is prolong the debt and accumulate even more interest.
• Unexpected Expenses: Medical bills, job loss, and emergencies can all lead to increased reliance on your credit cards.
• Multiple Credit Lines: If you are juggling multiple credit cards, it becomes harder to track your due dates and balances, which can lead to missed payments.

If your credit card debt goes unpaid, your creditors can take the following actions:

• Late Fees and Higher Interest Rates: Missing payments can easily result in penalty APRs and high fees.
• Collection Calls and Harassment: Your creditors might use aggressive tactics to collect payments from you.
• Lawsuits and Wage Garnishments: Creditors can sue, which can lead to potential wage garnishments or bank account levies against you.
• Credit Score Damage: When your payments are late or you default, it can significantly impact your credit scores and make future borrowing even more difficult.

Yes! Bankruptcy can provide you with a fresh financial start. Your Wenatchee bankruptcy attorney can help you determine if it’s the right option for you. If so, the two main types of bankruptcy to consider are Chapter 7 and Chapter 13.

• Eliminates most of your unsecured debts, including credit card debt
• Requires that you pass the means test to qualify
• Typically completed within 3-6 months
• Stops creditor harassment and lawsuits immediately after you file

• Involves a repayment plan lasting 3-5 years
• Allows you to keep assets while you catch up on your past-due debts
• Can reduce the total debt you owe through a restructuring process
• Prevents wage garnishments and collections against you

Bankruptcy laws are typically governed by federal statutes. A bankruptcy attorney familiar with Wenatchee’s court procedures can guide you through the process and ensure you comply with all legal requirements.

• Statute of Limitations on Credit Card Debt: Under RCW 4.16.040, the statute of limitations for credit card debt is six years. After this time, creditors can’t sue you for the unpaid credit card debt.
• Bankruptcy Exemptions: Washington provides exemptions that allow you to protect certain assets when you file for bankruptcy. For example, the homestead exemption (RCW 6.13.030) protects up to $125,000 of equity in your primary residence.
• Wage Garnishment Limits: Under RCW 6.27.150, your creditors can garnish up to 25% of your disposable earnings or the amount that exceeds 35 times the federal minimum wage, whichever is less.

Your Wenatchee bankruptcy attorney can help you understand these laws and how they might apply to your case.

If bankruptcy doesn’t feel like the right option, there are alternatives to consider.

• Debt Consolidation: This combines multiple credit card balances into a single loan with a lower interest rate, making it easier to manage payments.
• Debt Settlement: This involves negotiating with creditors to reduce the total amount owed.
• Credit Counseling: This can help you create a structured repayment plan.

All of these options can provide relief from overwhelming debt without the need to file for bankruptcy. However, you should speak with your attorney in Wenatchee to determine which option fits your situation.

Credit card debt can certainly become overwhelming, but you have options. Whether you choose debt consolidation, settlement, or bankruptcy, consulting one of our skilled attorneys in Wenatchee can help you make the right choice. You deserve a fresh start, and legal assistance can pave the way to financial stability.