I have represented thousands of people with too much credit card debt. The reasons for the debt can vary greatly, from unplanned medical bills, to an abrupt loss of employment, to gambling problems. Regardless of the reasons for the debt, there are various signs that a person has too much credit card debt. These indicators include the following:
Credit experts generally suggest that your debt service payments should not exceed 15-20% of your take-home pay.
Those percentages are arrived at by taking your total debt payments and subtracting your mortgage or housing costs. The remaining cash is then divided by your take-home pay to arrive at the percentage going for debt service.
There are various options for dealing with credit card debt. Be sure to consult a professional you can trust. A consumer credit counseling service is a good source of information and advice. Avoid debt consolidators if at all possible. Far too many are ineffective or, even worse, in the business only to take your money.
Another good source of advice is an attorney who specializes in solving financial problems. Do not rely upon advertisements for such a referral. Ask your accountant, banker, or another lawyer for a good referral. You do not necessarily need a bankruptcy lawyer, but you need one familiar with bankruptcy so you get an assessment of all options for solving your financial problems.
Some states, such as Wisconsin, offer wage earners an option to repay debt over a period of years, without interest. This can result in substantial savings and enable debtors to pay their debts in a manner they can afford.
Learn your options and get advice to help you decide which is best for your particular situation, and do not let pride or vanity get in the way of doing what is best for you and your family.