I like to believe that we have a great relationship with our clients who come in for credit card help. “Hugs all around,” is something usually said by them rather than by me. Sometimes however, things don’t start out as well as I would like, because one thing I say often rattles them to their core:
“...and as to the credit cards, stop paying them starting immediately!"
Now why should this advice create problems? Our clients are about to file either a Chapter 7 bankruptcy where they will not be responsible for most or even all of the cards or a Chapter 13 reorganization bankruptcy where they will pay a percentage on that credit card debt. That percentage can be as low as zero percent or, in certain circumstances, as high as 100% at zero percent interest.
Paying on these cards, once I tell the clients to stop paying on them, goes either to interest or to debts they are about to discharge.
Put Money to Good Use
What else can they do with that money? Maybe they can use it to put some things in the fridge that they haven’t been able to afford for a while. Possibly they can rip off those bald tires on their car and replace them with decent ones . They might finally call the plumber and take care of that leak, or they can replace that mildewed carpet in the basement that never seemed to dry after the flood.
But they should not pay on the credit cards if we tell them not to.
I know you have always paid on the cards. I know Macy's or JC Penney's or Kohl's has that once-in-a-lifetime sale that won’t be repeated. I know you like having the credit card to pay for something you think you really need.
But here's one thing you may have forgotten. If you are paying $700 per month on the credit cards and I tell you to stop, maybe you can use the same $700 and buy some of those things you really need.
So, when one of the bankruptcy attorneys at Steidl and Steinberg tells you to stop paying on the credit cards, stop paying on all of the credit cards. You really didn’t need the stuff in the sale brochure anyway.