Holiday credit card debt threatens the financial stability of many

The amount of credit card debt incurred by consumers during the holiday season in 2014 was significantly higher than in 2013.

During the holidays, many in Tennessee and throughout the country rely on their credit cards to manage the numerous expenses of the season. However, during the 2014 holiday season, consumers incurred significantly more credit card debt than they did in 2013. According to the New York Post, during the third quarter of 2014, consumers acquired nearly $16 billion of credit card debt, finishing off the year with a potential total of $60 billion in new credit card debt. This amount is 55 percent higher than 2013's total.

Why credit card usage is so high

While many may use their credit cards to purchase presents, decorations and other items for the holiday season, the New York Post states that many people put essentials, like food, onto their credit cards. This reliance on credit card debt may be partially caused by underemployment and stagnant wages in the country.

Additionally, many consumers feel like they may never be able to get out of debt. The New York Post states that in a recent survey, 18 percent of participants claimed that they would never be able to pay off their debts, a figure which is twice as high as the previous year.

Finding relief from overwhelming debt

Those who are overwhelmed with debt and who believe that they will never be able to pay off their debts may be able to find relief by filing Chapter 7 or Chapter 13 bankruptcy. According to the Federal Trade Commission, when a person files Chapter 7 bankruptcy, all of his or her assets that are not considered exempt are sold to provide repayment to his or her lenders. A person who files this type of consumer bankruptcy may be able to keep his or her exempt assets, which can include things like basic household furnishings, cars and work-related tools.

In comparison, Chapter 13 bankruptcy allows a filer to keep property that he or she might otherwise have lost if he or she follows a court-approved repayment plan to eliminate his or her debts over a three or five-year period. While Chapter 7 and Chapter 13 bankruptcy have their differences, each is designed to help consumers:

  • Get rid of unsecured debts
  • Stop wage garnishments, repossessions and utility shut-offs
  • Put an end to debt collection activities

Consumers who are overwhelmed by credit card debt in Tennessee should carefully consider whether Chapter 7 or Chapter 13 is right for their personal situation. If you desire to file bankruptcy to find relief from your debts, speak with an attorney to determine which type of consumer bankruptcy should be filed.

Keywords: credit card, debt, bankruptcy, Chapter 7