The Bankruptcy Alphabet – Q is for Quit Living on Credit

Once you’ve decided to file for bankruptcy protection, you need to make some serious changes to your financial life. The number one change for many of my clients is to quit relying on credit. Start paying by cash, check, or debit card. Quit using the credit cards (using credit that you don’t intend to repay is fraudulent) and quit making payments on them (once you’ve decided to file bankruptcy, making payments on credit cards is just throwing good money after bad).

I tend to use my credit cards for nearly everything, so it may seem hypocritical for me to tell others to stop. But my advice isn’t meant for everyone. If you pay your credit card bill in full and on time every month so you don’t pay any finance charges, credit cards can be a convenient way to pay. But there’s a reason banks make good money on credit cards. Miss your payment deadline by one day, and say goodbye to that 5% introductory interest rate and hello to a $25 late fee.

I see people every day who had the best of intentions when they started using their credit cards. The card was only going to be used to cover some necessary expenses one month and be paid back in full the next month. But something else came up next month and that credit card payment got pushed back again. Suddenly, $500 worth of charges ballooned to a $3,000 debt that will take years to pay off.

Credit cards can be convenient, but they can also be financial traps for the unwary.

Bankruptcy attorneys from around the country are taking part in this “Bankruptcy Alphabet” exercise. Please take a few minutes to check out these other blog posts on the letter “Q.”

Qualified Retirement Accounts – by Livonia Michigan Bankruptcy Attorney, Peter Behrmann
Qualified Retirements
– by Kauai Bankruptcy Attorney, Stuart T. Ing
Qualified Witness – by Lakewood, CA Bankruptcy Attorney, Christine A. Wilton
Qualified Written Request – by Metro Richmond Bankruptcy Attorney, Mitchell Goldstein
Qualified Written Request – by Northern California Bankruptcy Lawyer, Catherine Eranthe
Qualifying – by Colorado Springs Bankruptcy Lawyer Bob Doig
Quality Bankruptcy Attorney – by Omaha/Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
Questions – by Bay Area Bankruptcy Attorney Cathy Moran
Questions About Bankruptcy – Allen Park, MI Bankruptcy Attorney, Christopher McAvoy
Quick – by Jacksonville, Florida Bankruptcy Attorney, J. Dinkins G. Grange
Quicksand – by Los Angeles Bankruptcy Lawyer, Mark J. Markus
Quiet – by New York Bankruptcy Lawyer, Jay S. Fleischman
Quitclaim – by Cleveland Bankruptcy Attorney, Bill Balena

Image Credit: takomabibelot/flickr

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