Archive for the ‘Uncategorized’ Category

Taxes and Bankruptcy

Friday, January 19th, 2018

It’s that time of year again, and our thoughts turn to taxes. But what if you are considering or are involved in bankruptcy?

doing taxes

You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of the following conditions are true: The taxes are income taxes. Taxes other than income, such as payroll taxes or fraud penalties, can never be eliminated in bankruptcy. You did not commit fraud or willful evasion.
If you owe past due federal taxes that you cannot pay, bankruptcy may be an option. Other options include an IRS payment plan or an offer in compromise.

From the government website: If you are a person that has filed bankruptcy, a debtor’s attorney or a U.S. Trustee with questions about an open bankruptcy you may contact the IRS’ Centralized Insolvency Operations Unit, Monday through Friday, 7:00 a.m. to 10:00 p.m., EST, at 1-800-973-0424.

For individuals, the most common type of bankruptcy is a Chapter 13. Before you consider filing a Chapter 13 here are some things you should know:
•You must file all required tax returns for tax periods ending within four years of your bankruptcy filing.
•During your bankruptcy you must continue to file, or get an extension of time to file, all required returns.
•During your bankruptcy case you should pay all current taxes as they come due.
•Failure to file returns and/or pay current taxes during your bankruptcy may result in your case being dismissed.

Partnerships and corporations file bankruptcy under Chapter 7 or Chapter 11 of the bankruptcy code. Individuals may also file under Chapter 7 or Chapter 11. For additional tax information on bankruptcy, refer to Publication 908, Bankruptcy Tax Guide and Publication 5082, What You Should Know about Chapter 13 Bankruptcy and Delinquent Returns (PDF).

Other types of bankruptcy include Chapters 9, 12 and 15. Cases under these chapters of the bankruptcy code involve municipalities, family farmers and fisherman, and international cases.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Bankruptcy Resolution

Monday, January 8th, 2018

It is the beginning of the new year and I’ll bet you thought this blog was going to be about New Years resolutions. Debt Resolution is a different. It means forgiving of debt.

Group Of Friends Enjoying Christmas Drinks In Bar

Here’s some questions:

Does a bankruptcy relieve me of all my debt?

The policy of bankruptcy law is that the honest debtor who is in debt beyond its ability to repay its debts should receive a fresh start.

However, some debts must still be paid. Generally speaking, the following debts will not be discharged: taxes; spousal and child support; debts arising out of willful misconduct and or malicious misconduct by the debtor; liability for injury or death from driving while intoxicated; nondischargeable debts from a prior bankruptcy; student loans; criminal fines and penalties and forfeitures.

Secured debts generally must be paid if the debtor intends to retain the collateral securing the debt. If they are not paid, the creditor will usually take the necessary legal steps to recover the property.

Will bankruptcy stop a wage garnishment?  


Will bankruptcy stop a foreclosure?

Temporarily, yes. However, the lender is entitled to seek for relief from the automatic stay to allow it to continue foreclosure proceedings. Usually, to keep a home that is in foreclosure, the debtor will have to reach an agreement with the lender and resume making payments. A Chapter 13 can be helpful in accomplishing this if the creditor is not willing to voluntarily work out an agreement.

Will bankruptcy stop an eviction?

It may delay it, but the owner is entitled to possession of the property and will be able to resume eviction proceedings with court approval or after the discharge. Filing a Chapter 7 solely to avoid an eviction might be considered an abuse of the bankruptcy law. If the Bankruptcy Court finds that this is true, then the court can immediately dismiss the bankruptcy and impose other legal and monetary sanctions on you.

Will bankruptcy stop a judgment?

Yes. Most collection actions are stopped by bankruptcy.

Will a bankruptcy remove a lien?

Certain liens may be removed, but this requires a motion to be filed with the court. The procedures are complex and are best done with an attorney.

Is spousal support dischargeable?

Spousal support and child support payments generally are not dischargeable. Certain other dissolution related obligations, such as payments to others, hold harmless provisions and property settlement obligations, are not dischargeable.Back to contents

Can I discharge student loans?

Generally, student loans are not discharged in bankruptcy. Although there is an exception to this general rule; the student loan may be discharged if paying the loan will “impose an undue hardship on the debtor and the debtor’s dependents.”

The facts of the particular case will determine dischargeability. If a student loan falls into the exception, discharge of the loan is not automatic. The debtor should file an adversary proceeding in the bankruptcy court to obtain a court order declaring the debt discharged. Back to contents

If I co-signed for a debt, does bankruptcy affect the obligation?

If the debt is a dischargeable debt then you will not have to pay it. Your co-signer will become primarily responsible for the debt. If you file a chapter 13 petition, a special automatic stay protects certain co-signers during the bankruptcy proceeding. Back to contents

What if I do not list a creditor on the bankruptcy papers?

You are required to list all creditors. If you intentionally omit a creditor from your schedules, it is perjury and you may lose your bankruptcy discharge. However, if a creditor is not known to exist at the time the schedules are filed, you may amend your schedules at any time the case is open to add an additional creditor.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Credit Card Balance Transfers

Wednesday, December 27th, 2017

So we are approaching a new year. This is a great time to work on reducing your credit card debt. One way to do that is to transfer your credit card balance with one of those zero interest promotional card deals. Balance transfer cards allow you to move high-interest credit card debt to a low-interest credit card from a different issuer. The right offer can save you money and inch you closer to a prosperous new year.

credit cards

What to know about balance transfer credit cards

You should look for a balance transfer credit card with a lengthy 0% introductory APR period, so that you’ll have a nice long window to pay down debt interest-free. Also, make sure the card doesn’t charge an annual fee.

Balance transfer fees are harder to avoid, unfortunately. You’ll generally be charged 3% to 5% of the amount transferred, although some cards don’t charge this fee as long as you initiate the transfer within a specific timeframe.

You can transfer only as much debt as your credit limit on the new card permits — and generally you won’t know what your limit is until after you’re approved. If you have debt on several credit cards, start by transferring the balance from the card with the highest interest rate.

Remember that the goal of a balance transfer is to save money as you pay off debt — not necessarily to secure a lower monthly payment. We really want to look at the interest rates and the cost of borrowing that money, not the payment itself.

Maximize your promotional period

Once you’re approved for a balance transfer credit card, make a plan to help yourself stay on the debt repayment track.

These tips can help:
•Make payments on time to keep the promotional offer active
•Plan your monthly payment by dividing the amount you’re transferring by the number of months in the promotional period
•Make more than the minimum payment if you can
•Set reminders for your expiration date
•Don’t use the card for purchases or additional transactions, as that can delay your progress

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

After Bankruptcy

Wednesday, December 20th, 2017

So you have bankruptcy behind you. That’s great. But you want to make sure that you don’t get back in that situation again.

credit score


To start rebuilding your credit, you must (1) get any nondischargeable debts back on track; (2) start building a history of regular on-time monthly payments and responsible use of credit accounts; and (3) avoid taking on unnecessary debt.

(1) Making arrangements to pay any nondischargeable debts. If you have non-dischargeable debts, such as student loans or certain taxes, you will need to contact the creditor to make arrangements to pay them. If you do not arrange to pay these debts, the creditors can begin collection action and can report delinquencies on your credit report.

Nondischargeable student loans. As to student loans, you should receive a forbearance for the time you were in Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, the loans would have been paid the same as other unsecured creditors but would also continue to accumulate interest. In either case, you need to make arrangements to get these loans back on track after bankruptcy.

Fortunately, there are various programs to lessen the burden of federal student loan payments that are worth exploring to see whether you might qualify, including income-based repayment and occupation-related and public service loan forgiveness. Some private lenders have hardship programs of some kind. In any case, try to avoid deferments, as the accumulating interest may cause the debt to build to an unsustainable level.

Nondischargeable taxes. Regarding non-dischargeable income taxes, contact the IRS, state revenue department (e.g., the Pennsylvania Department of Revenue), or the local taxing authority to make payment arrangements. (The IRS will typically accept a monthly payment of around 2 percent of the total.) However, if you have a substantial tax debt, you may need the assistance of an attorney to work out a settlement. If you can pay off these tax debts in a lump sum at some point, you will likely save substantial interest and fees.

There are other nondischargeable debts, such as criminal fines and restitution, alimony, and child support. If you have any of these debts, be sure to consult your attorney.

(2) Using a secured credit card or small vehicle loan to help build a record of on-time payments.

(a) Secured credit cards. To begin rebuilding your credit, you may wish to obtain a secured credit card. A secured credit card uses money deposited in a bank account as collateral for the credit card. The creditor can take the money in the account only if you default. Some banks offering secured cards do not require a credit check, and it may be easier to obtain a card from them. However, be sure to shop around. Some secured card providers charge excessive fees and interest. Also, you should make sure the provider reports to all three credit reporting agencies (not all do).

It is important to use no more than twenty percent of your available credit on your secured card (or any credit card). Thus, if you have a limit of $500, avoid carrying a balance of more than $100 on the card at any one time. The purpose of this card is to rebuild your credit, so responsible use is essential. If you are a couple, it is a good idea to have a separate card for each of you.

Quick Note: A secured credit card is not the same thing as a prepaid credit card. Although very convenient, prepaid credit cards do nothing to improve your credit.

(b) Vehicle Loans. If you need a vehicle, a car loan is another way to rebuild credit. However, I do not suggest getting a car loan just to rebuild your credit. See below for information on obtaining a vehicle loan after bankruptcy.

(3) Avoid unnecessary post-bankruptcy debt. The main traps for post-discharge debtors are (1) the temptation to open too many credit accounts and (2) incurring too much debt.

Too many accounts: In some instances, post-bankruptcy loans and credit accounts may be available. However, I do not recommend obtaining multiple credit accounts after bankruptcy to try to improve your credit score. Some post-bankruptcy debtors believe that the more accounts they open, the faster they will rebuild their credit. That mindset is a recipe for disaster. With few exceptions, debt is not your friend. One or at the most two credit cards should be enough for anyone.

Keep in mind that each time you apply for credit, the inquiry reduces your score a bit. Moreover, if you have too many accounts, you may be tempted to over-utilize credit, which may severely damage your income-to-debt and debt-to-available-credit ratios (see below). The key to rebuilding your credit score is the responsible use of credit and living within your means.

How much is too much debt — Understanding the income-to-debt ratio and debt-to-available-credit ratio. One reason debtors often see their credit rating rise soon after bankruptcy is the reduced income-to-debt ratio. In other words, the amount of debt that they have compared to their income is now much lower. The income-to-debt ratio is a significant factor in credit scoring. Therefore, you want to keep this ratio low.

Just as important is the debt-to-available-credit ratio, which measures the percentage of debt you use compared to your available credit. Limiting your use of unsecured credit to less than twenty percent of each account’s available credit will show that you are a responsible user of credit. Maxing out credit is a sure way to damage your credit rating. Of course, I prefer to see clients pay off their credit cards each month and avoid revolving balances.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Christmas and Bankruptcy

Sunday, December 10th, 2017

If you are considering filing for bankruptcy, this Christmas may not be your best. But perhaps getting this all cleared up will make next Christmas a great one. One question you have have is whether to file before or after Christmas.

christmas cash

Bankruptcy law states that any debts incurred within 3 months before or after Christmas are considered non-dischargeable debt. This means all the money spent on gifts and other holiday items are the responsibility of the one purchasing them, and these bills must be paid off. There are 2 options in this matter. The first is reaffirming the debt, which means making monthly payments until it is completely paid for. The second is redeeming the debt, which is paying the full balance all at once. The exception to this is any item deemed a necessity. These debts could be discharged when bankruptcy is filed.

Holiday Bonuses and the Means Test

The means test refers to a set of steps one must go through in order to decide whether to file for Chapter 7 bankruptcy, which would mean writing of many, or all, of the debts incurred in only a few months, or file for Chapter 13 bankruptcy, which requires reasonable payments over a matter of 3 to 5 years. One of the areas covered in the means test is the income received in the 6 months before filing for bankruptcy.

This does not just mean the amount received on regular paychecks.  It includes money given for child support, lottery winnings, and even holiday bonuses. Because the income is decided based on the 6 calendar months before filing, it is a good idea to file before receiving the bonus. For instance, if the bonus comes on December 20 every year, filing in early December will not affect the bonus, because the 6 month calendar will run from June 1 to November 30.

Receiving Cash for Christmas

This falls under the same category as the holiday bonuses. If the money is received after bankruptcy is filed, it will not affect the means test, and will not factor in on the decision of whether to file for Chapter 7 or Chapter 13 bankruptcy. It is also better to file before these gifts are given because they may raise the amount of “income” earned in the 6 month period. If the income is too high, it may not be possible to apply for Chapter 7, so instead of writing off many of the debts, the debtor must file for Chapter 13, and be responsible for more repayments over a longer period of time.

Income Tax and Bankruptcy

There are 2 types of Chapter 7 bankruptcies. The first is “no asset”, which means that what is owned is either exempt, or worth too little to be sold to pay the debts. In this case, if bankruptcy is filed after January 1, even the IRS is not paid anything through the bankruptcy case. But this does not excuse the debt. Instead, arrangements will have to be made with the IRS to pay off the income tax owed. In an “asset” Chapter 7 bankruptcy, any item not exempt that is worth a fair price can be sold to pay off creditors. Because the IRS is considered a priority debt, they will receive payment before any other creditors. And though the debtor may lose property they valued and wished to keep, there will be one less debt to worry about once the bankruptcy case is complete.

In a Chapter 13 bankruptcy, there are 3 major benefits for filing after taxes have come due. The first is that you are protected from the IRS during the process of repayment. The second is that there is more flexibility for repayment, making it easier to pay off debts that are a higher priority. The third benefit is that there can be no interest or penalties added during the bankruptcy case.  In these instances, filing after Christmas in the New Year is a better option.


These are just a few things to consider when filing for bankruptcy. If cash gifts or bonuses are anticipated, and income tax debt is not expected, filing before Christmas is most likely the best option. But if those situations are reversed, filing after the New Year celebration has ended may be in your best interest. Either way, if filing is definitely in the future, a chat with a bankruptcy attorney may clear up any concerns, and help to decide which option is the best for each individual case.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Student Loans and Senior Citizens

Monday, November 27th, 2017

It is hard to imagine that a lot of seniors are concerned with student loan debt. However, surprisingly, there are three million people in that situation.

student loans

Thanks and refer, Bankruptcy Network. A recent PBS story, “More older Americans than ever are struggling with student debt,” highlights an issue that many bankruptcy attorneys have seen in recent years. As the article notes, ” The number of Americans age 60 and older with student loan debt quadrupled between 2005 and 2015 to nearly 3 million. And the average amount they owe has nearly doubled from 12-thousand dollars to almost 24-thousand.” That’s a lot of debt–my cheap calculator doesn’t have enough digits to display it, but it works out to about $72 billion dollars.

[Grand]Parent Plus loans, co-signing on private student loans, children and grandchildren who go into default on these loans, and even old, unpaid student loans they took out years ago are all resulting in collection efforts against seniors who just wanted to help a child or grandchild get a college education. And once a loan goes into default, the powers of the student loan collectors are massive. If a government loan, there is no statute of limitations, meaning that they can collect, quite literally, forever. I once had a client who was sued in 2014 for a student loan from 1976. Perfectly legal. (I was successful in getting the Court to throw the case out of court because of a doctrine called the “statute of repose,” meaning that because of the passage of time, my client could not have been reasonably have been expected to keep the records showing that he paid off the loan in the 1980s.) Government collectors can obtain an “administrative garnishment,” meaning that they can garnish wages and attach your bank accounts without having to sue and get a judgment. They can even garnish your Social Security! Private student loan collectors do have to deal with the statute of limitations, and do have to sue you before they can garnish or attach.

What are your options if you are faced with a student loan in default? One option that you may not have considered is a Chapter 13 bankruptcy.

“Aren’t student loans non-dischargeable?” most people ask. Not always, However, depending on circumstances, it nevertheless can be difficult and expensive to obtain the discharge in bankruptcy of student loans. But a discharge isn’t always necessary for a Chapter 13 to help.

When you file for Chapter 13, a provision of the Bankruptcy Code called the Automatic Stay goes into effect immediately. The Automatic Stay prohibits all creditors–including student loan creditors–from taking any action that could be considered an attempt to collect a debt from you or your assets. They cannot call you. They cannot send you nasty letters. They cannot send you bills. They cannot sue you, or continue with a pending lawsuit. They cannot attach, garnish, repossess, or foreclose on your assets. All proceedings immediately stop. The Automatic Stay remains during the entire course of your case, five years for a typical Chapter 13.

What do you need to do during that time? You have to make a monthly payment to a trustee, who takes that payment and distributes it to all of your creditors. How much will that payment be? It depends on your circumstances. But many of my senior clients in these circumstances have little more than Social Security and a small pension as income, so their payment is small–$25.00 a month. And as long as they make it, the Automatic Stay completely protects them from all collection efforts.

A Chapter 13 isn’t a long-term remedy–until Congress changes the law to allow for the discharge of student loans, it usually will not result in the discharge of the student loan. But it will stop the immediate problems, the calls, letters, garnishments and attachments. It will relieve a significant amount of stress, both emotional and financial. It will let you move forward instead of being dragged backwards. It will let you live your life free from the student loan collectors. It is something to seriously consider.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Things to Consider

Sunday, November 19th, 2017

Your bankruptcy petition could be denied. Here are some some things to consider to make yours is not denied.

bankruptcy court

1. The timing of your Chapter 7 bankruptcy petition matters

One of the ways that your Chapter 7 bankruptcy petition can be denied is if the timing of your filing is wrong. The general rule is that if you have filed Chapter 7 bankruptcy in the past and received a discharge, you must wait 8 years from the date of the earlier filing to file again. Similarly, if you have filed for Chapter 13 bankruptcy in the past and received a discharge, the waiting period is 6 years.

Having filed Chapter 7 bankruptcy in the past 8 years does not prevent you from filing other types of bankruptcy, however.

2. Chapter 7 bankruptcy income requirements

You may not have realized that in order to file Chapter 7 bankruptcy, you must meet the income requirements first. The income eligibility requirements are based on what the median income is for a family the same size; if your median income is less than that of the median household, you are eligible to file Chapter 7.

However, the court will also consider what your income is after certain expenses are deducted: someone above the median income might still qualify after deductions are made. To determine whether your household meets the income eligibility requirements, consult a qualified Chapter 7 bankruptcy attorney.

3. Omissions by mistake and fraudulent Chapter 7 bankruptcy filings

When filing for Chapter 7 bankruptcy, it’s important to make sure that you include all of your debt in your petition; only the debts listed in your petition will be discharged.

If you forget to list a debt on your petition, your paperwork can be amended to include the debt up to a certain point in the bankruptcy process. If, however, you purposely omit financial information (such as failing to disclose the income earned from a second job where you are paid in cash) or take steps to hide assets (such as hiding assets in an account in another person’s name), your bankruptcy discharge will be denied on the grounds of fraud.

To make sure that all of your debts are included in your petition and that you are not engaging in fraudulent activity when disclosing your financial information, seek the advice of a bankruptcy specialist.

4. The Chapter 7 may not discharge some of your debts

While generally bankruptcy petitions are approved, and discharges entered, there are circumstances where a specific debt may be excepted from discharge, while your other debts are discharged. The most common example of when this occurs is when the person filing bankruptcy excessively uses a line of credit in the three months before filing. Excessive use of credit right before filing bankruptcy can make it appear that you are taking advantage of the possibility of debt discharge. To prevent this, consult a bankruptcy specialist who is familiar with partial debt discharge.

5. The wrong bankruptcy attorney can cause your bankruptcy to be denied. Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Paying My Ex’s Debt

Monday, November 6th, 2017

Divorce is bad enough, but it can be particularly frustrating when they try to make you pay for debts that you feel belong to your ex. When going through a divorce, you can be left with different types of obligations. The most common is a domestic support obligation, such as child support or alimony. But you can also be made responsible for your spouse’s separate debts, usually as part of the property division.

couple arguing

For example, the wife gets to keep the dog and the house, and husband gets to keep the car. Wife, let’s say, then agrees (or is ordered by the court) to be responsible for all  of husband’s credit card debts. Then for whatever reason, the ex-wife doesn’t make the payment on the credit cards. The credit card companies then sue the ex-husband who tries to defend by saying that it is his ex-wife’s responsibility!

Does this work?  How can this happen?

The truth is that divorce court/family law agreements and judgments only affect the two spouses, not third party creditors like credit card companies. So in the above example, the failure of ex-wife to pay the credit cards as promised leaves her liable to her ex-husband, NOT to his credit card companies.

Can The Spouse’s Debt Be Discharged in Bankruptcy?

Sometimes the amounts involved can be quite substantial. In the above example, let’s say there were $100,000 in credit card debts that wife defaulted on. What can ex-hubby do?  He can, of course, file bankruptcy himself to deal with what always was his debt in the first place. But he can also pursue his ex-wife in family law court for failure to honor the agreement/judgment. This can result in altering any alimony/support payments being made, or being imposed.

But ex-wife potentially has a way out too. She cannot get rid of her obligation to her ex-husband in a Chapter 7 case.  But in a Chapter 13 case, she may. Chapter 13 of The Bankruptcy Code allows the discharge of debts incurred in connection with a divorce if they are not  part of a domestic support obligation (i.e. alimony, child support, etc.).

Thus, ex-wife can do a payment plan based on her budget and discharge the remainder of the debt owed to her ex-husband in a Chapter 13. It is possible though for the family law court to then order ex-wife to pay alimony to ex-husband, which would not be dischargeable in any bankruptcy chapter.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Getting Rid of Credit Cards

Friday, October 27th, 2017

Credit cards are a great convenience. I can’t imagine how you could travel without them – buying a place ticket, renting a car, getting a hotel room. So if you have credit cards, you want to keep them by all means. However, until things are under control, you should try not to use them.

credit cards

Here are three reasons why you simply must stop using your credit cards.

#1: They are Designed to Keep You in Debt

Credit card companies want you to be in debt. They literally thrive off of your debt, and when you manage to work your way out of debt, they miss out on the incredible amount of interest you had been paying up until that point.

For this reason, these companies actually set things up so that a person making the minimum payment and continuing to use the card each month would literally never work their way out of debt. Even a person with a relatively small debt of around $4.000 would need around 15 years to pay off that debt when paying only the minimum amount.

#2: Using Them Will Only Make Your Situation Worse

Clearly, because of the debt carousel the credit card companies have put you on, continuing to use your credit cards absolutely will not help matters. In fact, using your cards, even if you are gaining some sort of reward for doing so, will without a doubt make your debt situation worse.

#3: Having Them Around is Too Tempting

Carrying a credit card in your wallet, especially when you are accustomed to using the cards for anything and everything, is like carrying a bit of temptation in your pocket at all times. Resisting the urge to use the card when you come across an item you’d really like to have takes an incredible amount of willpower, and if you find yourself unable to resist, you only set yourself back further.

For this reason, it is much better to get that card out of your hands and focus on having fun without spending money.


We hope this post has inspired you to give yourself a new financial beginning this new year. By working your way out of debt and remaining that way, you give your family and yourself the priceless gift of freedom.

If you find your financial situation is too overwhelming to work out on your own, we hope you will consider speaking with an experienced bankruptcy attorney. Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Handling Credit Card Debt

Monday, October 16th, 2017

A lot of the most effective ways in dealing with a problem are common sense. But sometimes focusing on a problem and the solutions that you may already be aware of can help you move in the right direction. Here are some thoughts about credit card debt and how to reduce it.

credit card, computer

Step 1 – STOP Spending Money

This one may sound easy, but it is by far the hardest.  You have to figure out why you are spending so much money.  You may be just buying things that you don’t need.  You may be purchasing to satisfy your wants.  It is time to figure out the difference between wants and needs.  Maybe you should take a hard look at your finances and realize that you need a change.  Maybe you could  stop eating out, cut your cable, and create detailed grocery lists.  Maybe you could take your lunch to work every day as a way to eat better and save a lot of money.  These are the things that you can do to stop spending money.  Beyond paying your regular bills, you need to figure out where the rest of your money is going and cut off the spending.  It may be harsh, but it is important.

Step 2 – Pick Your Debt Payoff Method

Once you figure out how to stop spending money, then you need to choose a debt payoff method.  To be very honest, it doesn’t matter which method you choose. The only way you will get out of debt is if you choose a method. There are no winners here by choosing one over the other. If you choose something, you’re a winner! Remember that and move forward. I’ve even seen people start out with one method and switch. You can do it month by month. Just start today!

Step 3 – Stay on Target and Focused

Welcome to the next hardest step.  Paying down debt is not easy and it will usually take some time.  We all don’t have the luxuries to just pay off our debt in a couple of months.  It will most likely take years. There are so many temptations that occur in everyday life, but you have to understand your goal.

Do you want to be buried in debt or would you rather have financial freedom?  Choose financial freedom.  Don’t be afraid to tell your friends or family that you can’t do something because you can’t afford it.  You may not want to irritate your friends or family, but these are necessary changes.    If they love and respect you , they will understand. Paying off debt is about you becoming a better person and more financially stable.  You have to do what ever you can to stay on target.  Make some simple changes along with harder changes to make sure you stay on your debt payment plan.

Step 4 – Make More Money

You can only save so much, so there might be many times where you just don’t make enough money to accelerate your debt repayment.  There are quite a few ways to make more money besides your full time job.  You can sell things on Craigslist, sell on eBay, taking surveys (yes, this can work), start a blog.   You have to think outside of the box when you are paying down debt.  Think of something that you are good at and go see if you can make money from it.  Don’t spend money to start a side business though.  That would be unwise.

Do you want to be buried in debt or would you rather have financial freedom?  Don’t be afraid to tell your friends or family that you can’t do something because you can’t afford it.  You may not want to irritate your friends or family, but these are necessary changes.    If they love and respect you , they will understand. Paying off debt is about you becoming a better person and more financially stable.  You have to do what ever you can to stay on target.

Step 5 – Learn How to Save More Money

As you can probably imagine, people aren’t typically much of a saver when they are in credit card debt. . It hurts to realize what you did to yourself with your needless spending.

Just look at the power of compound interest. Goodness that’s some powerful stuff. You could be leaving money off the table for  yourself later down the road and for emergencies in general. We all need to try to save for retirement,  do some investing, and socking away cash for emergencies.

It seems we really make saving money much harder than it needs to be. Saving money is really not that hard. We just have messed up priorities. We can’t differentiate between wants and needs and that needs to stop. Once you stop using “need” for everything, you will realize that you could do without so much more and keep more money in your pocket. Change it and your financial freedom will follow!

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.