For people in Virginia and across the United States, credit card debt can be a severe and escalating problem. Virginia is one of the five states whose residents owe the most on their credit cards. While Virginians tend to have higher median incomes, allowing them to pay back their bills, circumstances can change rapidly in case of a job loss, divorce or disability. The lower a person’s income, the more he or she may struggle to repay their growing debt. Those difficulties can cause the debt to grow even more as interest charges, late fees and other costs stack up on top of one another.
Many financial experts recommend setting aside 15 percent of income to pay back debts, including credit card debt. For someone making around $47,000 annually, it can take a year and a half to pay back around $8,000 in debt. During that time, the person could wind up owing $1,320 in credit card interest. Of course, the consequences can be even more significant when the debt burden is higher or income is lower. People may find themselves facing unrepayable debt and dealing with collection calls, lawsuit threats or even judgments.
In 2018, the average household across the country had around $7,000 in credit card debt. This comes on top of other monies owed, including home mortgages, car loans, student debt or medical bills. On the credit card debt alone, an average household could owe more than $1,000 in interest in only a year’s time.
When credit card debt becomes a major burden, people may be unsure what to do. Chapter 13 bankruptcy and other forms of personal bankruptcy may offer promising options for debt relief. A bankruptcy lawyer may advise people dealing with significant debt about their options to move forward and seek a new financial future.