The Cost of Bankruptcy

CAN YOU AFFORD NOT TO GO BANKRUPT? After several years of declining credit card debt levels during and after the economic recession of 2007 – 2009, credit card debt is again on the rise. According to the Federal Reserve, revolving credit - made up mostly of credit card debt - posted an annualized increase of 9.3% in early 2013. THE WALL STREET JOURNAL Simultaneously, interest rates are also rising from historic lows. But household incomes are not experiencing the same growth. According to the Wall Street Journal, American's incomes have dropped since 2000, and aren't expected to recover those losses until about 2021. The numbers add up to unsustainable debt loads for many households, thousands of dollars in interest payments, and a bleak future of toiling to make monthly payments to mega-corporations which are generating record profits and powering the stock market to new all-time highs. But there is an alternative – bankruptcy offers consumers a safe and effective escape from this vicious cycle. HOW DOES YOUR DEBT COMPARE? Average household credit card debt: $15.112 [1] Average unsecured debt for households struggling with debt: $24,000 [2] HOW MUCH DOES IT COST TO PAY OFF CREDIT CARD DEBT? BALANCE 10,000 15,000 20,000 25,000 Estimated minimum payment $200 $300 $400 $500 Time to pay off 64 YEARS 73 YEARS 80 YEARS 85 YEARS Interest charges during pay-off period S $43,559 $67,131 $90,702 $114,273 125% of minimum payment $250 $375 $500 $652 Time to pay off 6 YEARS 6YEARS 6 YEARS 6 YEARS Interest charges during pay-off period S $6,481 $9,721 $12,961 $16,201 Calculations based on 19.8% Annual Percentage Rate, and making no purchases during repayment period. [3] HOW MUCH DOES IT COST TO DECLARE BANKRUPTCY? AVERAGE ATTORNEY'S FEE & FILING COSTS: $1500 [4] COURT FILING FEE: $306 [5] AVERA GE AMOUNT OF DEBT ELIMINATED: $82,364 [6] AVERAGE TIME FROM FILING TO ELIMINATION OF DEBT: 205 DAYS 71 TIME TO REBUILD CREDIT SCORE: 3-5YEARS [8] THINKING ABOUT BANKRUPTCY ? Many people are afraid of bankruptcy. But most people who have lived through it will tell you they wish they had done it sooner. The process of filing bankruptcy can be complex, but an experienced bankruptcy attorney can make it fast and easy. The first step is scheduling a bankruptcy consultation, so you can discuss your situation and options privately. For more personalized service, look for a firm that allows you to meet directly with an attorney – not a paralegal or office worker, as is common with many large law firms. Presented by: Law Office of Barbara Craig For more information, visit http://bcraiglaw.com/bankruptcy Law Office of Barbara Craig 1008 S. Pacific Ave Suite 205 Los Angeles (San Pedro), California 90731 This infographic does not constitute legal advice. Only a qualified attorney can provide you with legal advice for your particular situation. Sources: [1] Estimated averages for households with debt: Nerdwallet.com, November 2013 [2] National Foundation for Credit Counseling, 2012 [3] Credit Card Repayment Calculator: http:// federalreserve.gov [4] CNN Money, May 2012 [5] Chapter 7 filing fee as of November 2013: http://uscourts.gov [6] Average unsecured debt (credit cards, medical, and other unsecured debt) appearing on Chapter 7 bankruptcy filings in 2012: 2012 BAPCA report, http://uscourts.gov [7] For Chapter 7 bankruptcies filed in 2012: 2012 BAPCA report, http://uscourts.gov [8] Complete Idiot's Guide to Improving Your Credit Score, 2007 Copyright © 2014, Law Office of Barbara Craig, all rights reserved.