The Recent Surge in Credit Card Defaults: What You Need to Know
The financial strain on many Americans has grown in recent months, with credit card defaults hitting levels not seen since 2010. In the first nine months of 2024 alone, lenders wrote off over $46 billion in delinquent credit card loans—a staggering 50% increase compared to the same period in 2023.
For those struggling with credit card debt, understanding the difference between delinquency and default is key. If you’re finding it hard to keep up, or worse, are nearing default, Nicole Anderson, a trusted bankruptcy lawyer, can help you explore your options.
Delinquency vs. Default: What’s the Difference?
- Delinquency occurs when a payment is missed, typically reported to credit bureaus after 30 days. This can negatively impact your credit score and lead to late fees or increased interest rates.
- Default happens when payments are missed for an extended period—usually 180 days (or six months). At this point, the credit card issuer may close your account and send your debt to a collection agency. The consequences of defaulting are severe, including substantial credit score damage, collections efforts, and legal action.
If you’re worried about falling behind on payments or are already facing default, Nicole Anderson can guide you through the legal options available to protect your financial future.
The Role of Bankruptcy in Addressing Credit Card Debt
For those burdened by overwhelming debt, bankruptcy can offer a path to financial relief. Nicole Anderson specializes in Chapter 7 and Chapter 13 bankruptcy and can help you understand how each option applies to your situation:
- Chapter 7 Bankruptcy: This option allows eligible individuals to discharge unsecured debts like credit card balances entirely. If you’ve already defaulted, Chapter 7 may provide the fresh start you need, erasing the debt and freeing you from collection actions.
- Chapter 13 Bankruptcy: If you’re not eligible for Chapter 7 or you’re seeking to catch up on overdue payments, Chapter 13 lets you reorganize your debts into manageable monthly payments over three to five years. This can help reduce the burden of late fees and stop the spiraling interest that comes with defaulting.
Even if you’re not yet in default, taking action before the situation worsens could make a significant difference. Nicole can help you determine the best path forward and avoid the worst consequences of missed payments.
Why It’s Important to Act Quickly
Credit card defaults come with lasting consequences:
- Credit Score Damage: Defaults can remain on your credit report for up to seven years, making it harder to secure loans, rent apartments, or even get a job. Bankruptcy, while not without impact, can provide a more controlled resolution to financial challenges.
- Late Fees and Spiraling Interest: The longer your debt remains unpaid, the more it grows. Defaulting can add significant late fees and interest to your balance, making repayment nearly impossible without intervention.
If you’re already feeling the pressure, don’t wait for things to get worse. Contact Nicole Anderson today to learn how she can help you regain control of your finances.
Take Control of Your Financial Future
No matter where you are in the process—whether you’re current but struggling, behind on payments, or already in default—Nicole Anderson has the experience and compassion to guide you through this challenging time.
Schedule a consultation today to learn how bankruptcy could provide the relief you need. With Nicole’s help, you can navigate your options and move toward a more secure financial future.
