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Default Judgments Often Caused by Credit Card Debt

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While you may find that cash in your wallet is a rarity today, that is not necessarily representative of your financial health. Although we know ‘cash is king,’ for many of us today, the debit and credit cards are our main mode for spending. As direct deposit for paychecks becomes more common, along with the ability to transfer money back and forth through digital apps, there is often much less need to go to the bank and withdraw paper currency to do our spending. And while you are in much less danger of being mugged (identity fraud is another conversation altogether!) and having your money taken, you can lose it myriad other ways.

Overdraft fees, credit card fees, late fees, and interest all add up when it comes to spending via plastic. It is also far easier to lose track of your budget. Groceries? Swipe. New clothes? Swipe. Dinner? Swipe. You may expect your card to blow up from overuse during times like the holidays and vacations—or just weekends spent running errands and stocking up on the necessities. Credit cards may come into play for more serious use though too, like medical co-pays and tests, prescriptions, and more. If you have lost your job recently or your hours were cut, you may be relying on credit cards as a form of income. There are many reasons why you might end up maxing out the credit, but if you don’t have the income to pay your creditor, trouble looms ahead.

The average household debt today looms at $131,431, with almost $16,000 of that being credit card debt. Americans are paying over $900 in interest each year on average for accounts with revolving debt, and many are not able to keep up with plans for paying off debt for multiple reasons. It can be hard to tabulate exactly how much is coming in and going out (especially for larger families), and there may be more debt than is realized. The cost of living also continues to rise, but many individuals are not receiving raises commensurate with what they require to keep up financially; in fact, recent analysis showed that medical costs have gone up 34 percent and groceries 22 percent. And while income growth increasing at 20 percent may seem like a slim margin, it makes an enormous difference.

Overspending is an issue for many individuals and families as the temptation to give in and spend is so much easier with credit.

“Finding a way to put money toward paying off debt, especially high interest debt, is the best way to free yourself from the vise grip debt can have on your budget,” says Kimberly Palmer, NerdWallet’s credit card expert.

“Taking small steps, such as making sure savings are in high-yield accounts, renegotiating monthly bills and using a cash-back credit card can free up cash that can be put toward debt payments until they are paid off in full,” she says. “Also, comb through your transactions over the last few months to see what items you can cut, such as subscriptions, restaurant meals or entertainment expenses.”

All it takes is one or two bad months where you get behind though, or a major crisis, and you may find yourself delinquent on numerous accounts. That may transition into serious issues with one or more creditors, and give way to collection lawsuits. When not responded to, or incorrectly so, default judgments may be granted automatically—meaning there is the potential for much worse consequences such as losing up to 25 percent of your paycheck in garnishment, seeing your property taken by the creditor to be sold for satisfaction of the debt, or having bank accounts frozen, causing an escalation of checks that may bounce, deposits that are sucked into the attachment by the creditor, and more. If you find yourself in such a situation, do not go it alone! This is the time to consult with a collections lawsuit/judgment attorney from a firm like Fitzgerald & Campbell, APLC.

If you are trying to figure out how to handle overwhelming debt or collection lawsuits or judgments, thinking about filing for bankruptcy, or exploring other options for debt reorganization, contact us now. Our attorneys have decades of experience in serving clients with similar financial situations. Let us review your case and discuss what would work best for you. We are here to help!

Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at info@debtorprotectors.com

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