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Christopher Todd Morrison, P.C.
Affordable Bankruptcy
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Using credit cards responsibly

Many people in Texas who struggle with debt decide to cut up their credit cards so that they can avoid buying items they cannot truly afford. While credit cards can get many people into debt, they also can play an important role in a plan to responsibly rebuild a good credit history.

Debtors can use rewards points on some cards for things like airline miles or cash back to offset expenses. Paying off cards every month is key for debtors who want to avoid unnecessary interest costs.

Failing to use a credit card can damage credit, especially if the card is linked to one of the debtor's oldest accounts. Card issuers may close credit card accounts if a card is not used for months. Using credit cards for everyday expenses and paying them off frequently can help build a positive credit history, which can help borrowers get a lower interest rate when they need to take out a loan.

Credit card users should make sure that they keep their credit card utilization below 30% of their available credit and have different types of loans to demonstrate that they can manage multiple types of accounts.

Bankruptcy is another option for debtors who need a financial fresh start. Most individual debtors choose to file a Chapter 7 bankruptcy, which allows a debtor to clear all his or her unsecured debts. Debtors may file for a Chapter 7 bankruptcy as married partners or individually even if they are currently married.

An attorney may be able to assist debtors who are considering bankruptcy figure out if it is the right option for them. Some debtors may not qualify to file a Chapter 7 bankruptcy because their income is too high, or they have not waited long enough since previously filing. For some debtors in this category, a Chapter 13 bankruptcy may be an option.

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