If you can only afford to pay the minimum payment required on your credit cards, you probably need to file bankruptcy. Minimum payments are designed so that the debtor making the payment will pay the maximum amount of interest on their debt and pay on the debt for the maximum amount of time. It probably makes no sense to struggle paying off a credit card for 8 years when you can discharge it in a few months through Chapter 7 bankruptcy or pay it off in as little as 3 years in Chapter 13 bankruptcy .
Paying the Minimum on Your Credit Card
Below are a few things debtors should ask themselves if they can only afford to pay the minimum on their credit card:
How Long Will it Take Me to Pay This Credit Card Off?
If it will only take a year or two and you’re making regular payments and have no other debt you may be fine. But if it will take you five, or even ten years to pay off the debt while making only the minimum payment, you probably should consider bankruptcy.
Am I Sacrificing Other More Important Financial Goals?
If making only minimum payments will extend your credit card pay off date by years you need to consider what other important financial goals you are sacrificing. Does your family have healthcare? Have you saved for retirement? Do you even have an emergency fund? If not, then you may want to seriously consider discharging your credit card in bankruptcy.