This time of year it is not uncommon for individuals throughout the nation, including the state of Florida, to spend a lot of money on holiday related gifts and celebrations. Generally this period extends from Thanksgiving to the first of the year. In some cases, people plan ahead for this expensive time of year by saving and creating a budget. Other times however the expenses unexpectedly grow causing people to turn to credit cards.
One family economist provides several tips on how to avoid deep debt following the holidays. First she suggests sticking with either debit cards or cash to pay for the gifts and associated items purchased for various celebrations. Those who do use credit cards to cover these expenses should make sure that when the statement with those charges arrives, they can pay the bill off right away. In addition, no more than two cards should be used and in most cases, because of the high interest rates generally tied to cards issued by retailers, they should be avoided.
After the holiday season is over there are inevitably some people who will decide that they are too overwhelmed with debt to find a way out of it. In these instances financial relief may be sought via a consumer bankruptcy filing. The chapter under which a consumer will file varies depending on each individual’s circumstances. That determination is generally made via a means test.
The chapters most commonly filed under by consumers are Chapter 7 and Chapter 13. In addition to resulting in a better financial situation, filers see benefits along the way as well such as an end to creditor harassment and repossession actions. Filing for bankruptcy can also put a stop to foreclosure actions. As individuals facing any of these situations are probably aware, these matters are often stressful to deal with.
Of course the spending done over the course of one holiday season alone is usually not enough to warrant a bankruptcy filing. It may however be the final straw. Individuals who have reached this point may be unsure of what steps to take. In most cases consulting with a bankruptcy lawyer is a good place to start.
Source: The News-Star, “Shop wisely: Avoid post-holiday credit hangover”, Greg Hilburn, Dec. 8, 2013
