People love their credit cards. Lots of folks rely on credit cards for every day expenses. Others simply use them for the airline miles or Disney Dollars. Although many people learned many financial lessons during the last recession, new statistics released by financial site CardHub show that Americans incurred over $57 billion in new credit card debt during 2014. Projections indicate that 2015 numbers will exceed $60 billion.

In the Sacramento area, the average balance on credit cards was $4,299 in 2014. The San Francisco Bay Area is only marginally higher. Considering the median annual earnings are much lower in Sacramento, this is a significant indicator that Californians in places like Citrus Heights and Elk Grove have too much credit card debt.

The financial news stations are happy about these numbers because it shows that people are confident enough to spend and incur debt. However, that is little consolation for the individual consumer who is languishing under the burden of credit debt and high interest rates. The average account holder with a card carrying a balance has an interest rate of roughly 13%, according to a Federal Reserve report. This means that it would take the average person with credit card debt in Sacramento over 20 years to pay off their balance with minimum payments. And, worse, they will have paid over $4,000 in interest alone.

This kind of debt can affect families in a number of ways. It can stress out the parents. It can take money away from more worthy budget line items, like college savings accounts. Fortunately, Chapter 7 bankruptcy exists.

Chapter 7 Bankruptcy is an incredibly powerful tool that has the ability to wipe out credit card debt and allow families to focus on investing in the future instead of padding the bottom line of major banks. Under most circumstances, many types of unsecured debt can be eliminated by the bankruptcy discharge, including credit cards, medical bills, and even tax debt (if a number of conditions are met.)

Many people make the mistake of using non-lawyer debt settlement programs to try to get out of debt. These programs are usually operated by for-profit companies. The Federal Trade Commission has issued recommendations that express the risk of debt settlement companies. Many of these programs require the consumer to deposit money in a special savings account for three years or more before all the debts are settled. In addition, many of the recommendations by these companies can cause long-term credit report problems.

The biggest risk is that the creditors are under no obligation to negotiate a settlement of the amount owed. There is a chance, sometimes a very high chance, that the debt settlement company simply won’t be able to settle the debt.

However, a well-known bankruptcy law firm has the power of the Constitution when it files a bankruptcy. The creditors have no choice but to listen. And a typical Chapter 7 only takes four or five months to complete. When deciding how to cope with credit card, it is a good idea to consult an experienced Citrus Heights bankruptcy lawyer.