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Has job loss resulted in overwhelming credit card debt?

On Behalf of | Oct 23, 2019 | Uncategorized |

In order to meet financial needs, most Texas residents need to go to work and generate an income. It is common for people to rely on that income to meet their basic needs, make rent or mortgage payments, stay on top of credit card bills, and for numerous other financial matters. As a result, if you lose your job, you undoubtedly will worry about your finances.

Whether you anticipated losing your job because rumors of layoffs were going around or being let go came as a total shock, you likely did not have time to make preparations before the event happened. Unfortunately, it can be difficult to prepare for job loss in any capacity, and you may already feel the stress of not generating an income.

Do you have credit card debt?

Without a regular income, your outstanding credit card balances have a chance of becoming much worse. If you end up missing a payment, you could face late fees and other penalties that could only cause your balance to increase. If you have concerns about your credit card debt, you may want to consider taking the following steps to potentially help your situation:

  • Ask your creditors about hardship programs. Some credit card companies offer assistance to individuals facing hardships and may lower interest rates or monthly payments temporarily.
  • Avoid credit card use if possible. Accumulating more credit card debt when you already cannot pay off your other balances is not an ideal scenario, though you may end up needing credit to meet your basic needs.
  • Leave money in your 401(k). It may seem tempting to use your retirement funds to pay your current bills, but doing so could lead to taxation, early withdrawal penalties and overall not be as helpful as you had hoped.
  • Make credit card payments if you can. If you can meet your minimum monthly payment, continue to make those payments to avoid penalty fees.

Unfortunately, these steps may quickly become too minimal to actually help you keep your credit card debt under control while you go without an income. If you find yourself in a predicament in which you feel overwhelmed by your debt with no realistic possibility of paying it off in the near future, you may want to consider filing for bankruptcy. Though it may not seem like an ideal situation, it could give you a fresh start.