Credit cards are helpful in emergencies. Unfortunately, however, relying on credit cards can have negative long-term effects. Credit card debt may accumulate slowly over time. A serious illness, divorce, job loss or other issue can make it impossible to pay your credit card balances.

As your balance looms toward the upper end of your credit limit, you face not only massive interest charges, but also fees, such as an overlimit fee assessed when the company charges interest on your balance. You’re spending a lot of money on payments each month, but your balance isn’t going down.

Late payments or missed payments may result in collections calls. Bankruptcy may offer a reprieve from collections activity. If you are considering bankruptcy because of serious debt, you should speak with an experienced Michigan bankruptcy attorney as soon as possible, before making decisions.

Credit card debt can be hard to overcome

When you owe a lot of money on credit cards, you may take steps to correct the issue. Perhaps you open a new card and transfer your balance to take advantage of low initial interest rates. However, when you start using one or both of the cards for new purchases, you’ll just increase your debt load. If you feel you are drowning in credit card debt, you may want to consider filing for bankruptcy.

You can protect some or all of your property in bankruptcy

Bankruptcy law in Michigan and federal law exempts certain assets from liquidation in Chapter 7 bankruptcy. Liquidation occurs when the bankruptcy court orders the sale of assets to cover your debts. A Chapter 7 bankruptcy, where your debts are discharged, not repaid, allows for the retention of $30,000 in equity for most people. Those over 65 or who are disabled can retain $45,000 worth of home equity.

A Chapter 13 bankruptcy, where your debt is restructured for more reasonable repayment, can protect your investment in your home. Under Chapter 13, you would repay your past due mortgage balance over a three to five year time frame. This would help you keep your home.

An attorney can help you obtain bankruptcy relief

You don’t have to shy away from answering the phone or dread the daily delivery of mail. When you file for bankruptcy, all collection activity will cease. Your attorney can help determine whether Chapter 7 or Chapter 13 is a better option for your income level and debt situation. The sooner you speak with an experienced Michigan bankruptcy attorney, the sooner you can escape the pressure of debt collection and the inability to repay what you owe.