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Seattle Bankruptcy Law Blog

Should I freeze my credit card in a block of ice?

When it comes to spending control, many American consumers may find it difficult to keep themselves from whipping out their plastic and buying something frivolous or unnecessary. For this reason, creative credit card owners have invented a host of ideas to help them control their spending impulses. There a few that might surprise you with how well they work.

Freeze your credit cards in ice cubes. Yes, many Americans have resorted to putting their credit cards inside of a Ziploc freezer bag filled with water. For some, this works to "freeze" their spending. Some believe that the delay it takes to thaw out your credit cards is just enough time and hassle to help you thaw out the reasons driving you to make an unintentional purchase.

Washington state bankruptcy exemptions: 3 things to remember

If you're filing for Chapter 7 bankruptcy, you may already know that a lot of your personal property will be exempt from liquidation. This means that your bankruptcy proceedings will not leave you debt-free and possessionless. If bankruptcy works the right way, you should emerge from the proceedings with the essentials you require to live your life and do your job, while getting to keep various items that are essential to your life.

When reviewing what property is exempt and what property is not in this respect, keep the following three things in mind:

Paying taxes with your credit card is a bad idea

Just like any kind of unforeseen expense, getting a surprisingly large tax bill can really set you back financially. For this reason, many Washington residents will simply pay their taxes on their credit cards with the idea of paying the money back later. The problem is, for some, paying taxes with a credit card results in a never-ending debt issue.

Here are a few more reasons why it's a bad idea to use your credit card to pay your taxes:

  • You have to pay more in taxes: The IRS charges people more money if they pay by credit card. In fact, sometimes they pay as much as 1.99 percent on these transactions.
  • You'll pay credit card interest on the bill: If you have to hold the balance on your credit card, you'll need to pay high-interest rates on this debt.
  • Don't think credit card rewards will save you: You might get a reward for spending so much money on your credit card in the form of points, but this benefit will be ruined if you ever have a late fee. Cards usually charge a significant amount of money in late fees.

Now is the time to get your credit card debt under control

A small increase in the Federal Reserve's interest rates could have a dramatic effect on the American public -- especially those who are carrying consumer credit-card debt. As it stands, WalletHub reveals that United States consumers are holding on to a lot of credit card debt at the moment and the problem is only getting worse -- to the tune of $92 billion worth of extra debt accrued last year.

Oddly, banks have been very happy to dole out this debt to consumers at low interest rates. However, according to WalletHub, borrowers could find themselves in trouble as the Fed increases interest rates. According to the financial news website, during the past 30 years there were four instances when consumers loaded up on credit card debt like this, and in every case, the Fed responded by increasing interest rates.

50 Cent's bankruptcy: Is he a Bitcoin millionaire or not?

Rumors have been circulating about the rap superstar 50 Cent being worth millions of dollars in Bitcoins. Those rumors allege that he forgot about his cryptocurrency holdings. This is a potential issue, because he is going through bankruptcy proceedings.

The news surfaced last January. Allegedly, 50 Cent forgot that he owned Bitcoin that has since surged in value. This forgotten investment could be worth millions of dollars. However, the rapper is now saying that this stash of bitcoin never even existed.

Can bankruptcy prevent my home foreclosure?

The last thing any homeowner wants to happen is foreclosure. The fears associated with this process are even worse if your spouse and children live with you in your home. That said, there are many people who have delayed and prevented their foreclosure proceedings through a strategic bankruptcy filing. Chapter 13 bankruptcy may be particularly useful to homeowners in this regard as it's a way to restructure your debt, giving you some breathing room and making it affordable to get back on financial track again.

Chapter 13 bankruptcy allows you to create a repayment plan for your debts that are past due. As a part of your debt payoff plan, the bankruptcy court will require you to submit a monthly payment to satisfy your debts. As long as a Chapter 13 filer stays on track with his or her bankruptcy plan payments and completes them – which will take approximately three to five years – the filer will be able to avoid foreclosure and keep his or her home.

The 10 credit card commandments: Follow them or fall into debt

There are few rules of the road when using credit cards: Call them the 10 Credit Card Commandments, if you will. When you follow them, you'll stay out of debt. When you break them, you run the risk of your debt situation getting terribly out of control. Here are 10 mistakes you need to avoid in this regard:

  1. Don't make minimum payments: You always want to pay in excess of your minimum payment or it will take years -- even decades -- to pay off your debt as it accrues massive amounts of interest.
  2. Don't pay late: Paying late will result in exorbitant fees and increases in your interest rates, causing your balance owed to skyrocket.
  3. Don't loan your credit card to a friend: If your friend needs to borrow money on your credit card, and you agree, go with him or her and use the card personally. Never trust your credit to another individual unless it's your spouse.
  4. Don't ignore your statements: Keep a close eye on your credit card statements so you know what your debt situation looks like.
  5. Don't let your credit card debt get sold to a debt collector: Make every effort to get current on your payments to prevent your debt being sold to a collection agency.
  6. Don't delay reporting your stolen or lost cards: Report your stolen and lost credit cards immediately to avoid identity theft.
  7. Don't max out your card: Maxing out your credit card will hurt your overall creditworthiness.
  8. Don't close your credit card because you're angry: This will not achieve anything except increase your credit utilization, which will hurt your creditworthiness.
  9. Don't apply to lots of cards at the same time: Credit reporting agencies will find this kind of behavior suspicious and it will hurt your creditworthiness.
  10. Don't ignore the terms of your credit card: Understand the interest rates and terms associated with your credit cards to avoid financial problems.

If you can follow the rules above, you'll decrease your chances of falling into debt. However, regardless how your current debt situation came about, you may want to investigate different ways of getting out of the problem. Depending on your situation, bankruptcy or other solutions could serve to improve your financial situation greatly.

Is high credit card debt damaging for your health and happiness?

We all know that high cholesterol and high blood pressure are bad for our health, but what about credit card debt? A recent survey conducted by NerdWallet of 2,000 credit card users showed that having a high amount of credit card debt can present some serious health consequences for Americans.

Perhaps it's because of the sleepless nights, perhaps it's because of the high blood pressure, but 86 percent of people carrying a high amount of credit card debt say that they wish they hadn't made the purchases that led to that debt. They primary regret how long it took them to pay off the debt due to the high expenses and high interest rates they were forced to pay, which increased their stress levels.

Important facts about Chapter 7 bankruptcy

There are a lot of misconceptions and false information floating around about Chapter 7 bankruptcy. Because some of this false information is so common, it's understandable that many people seeking bankruptcy will initially believe it. If you're really serious about using bankruptcy as a process to get back on track, keep reading. You might need to educate yourself about common myths.

Bankruptcy isn't a quick fix. Although Chapter 7 is the fastest form of debt resolution, the process will still take time to prepare, and then it will take approximately four to six months to bring to conclusion. In addition, one's bankruptcy history will linger for years. Although the person will be better off financially, his or her credit can take time to recover.

3 reasons to never hold debt on your credit cards

Everyone knows that credit card debt is bad. Nevertheless, they still get into debt trouble again and again. In fact, some people have had to file for bankruptcy multiple times in order to resolve debt troubles that they had no way of getting out of.

For these reasons, it's important for everyone to review exactly why credit card debt is so awful. Here are three reasons why you should never hold any kind of credit card debt:

  • Credit cards come with high interest rates: Many credit cards are costing you upwards of 20 percent annually on your balances. This is a massive amount of money, and if it takes you years to pay off your debt, you could be paying double or triple -- or more -- of the amount you originally put on the card. You might have thought you got a good deal on the new television you bought with the card, but when you consider that you will likely pay triple that amount after years of paying off your card, it's not such a good deal anymore.
  • It takes too long to pay off: Your minimum payments might not look like a lot of money -- and that might be a good thing for your finances at the moment -- but if you hope to ever get out of debt fast, you'll need to pay a lot more money each month to pay down your credit card bills.
  • You're not making money off your purchases: If credit cards were used to buy items that increased in value, like a home or a piece of real estate, that would be one thing, but most people use their cards to buy consumable items that don't bring them any extra monetary benefit.

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