Holiday spending can quickly go overboard. Even if you had the best of intentions to stay within budget this year, chances are you paid for some holiday expenses with a credit card. And if you did, you are not alone.
Holiday debt is highest in eight years
LendingTree tracked holiday spending and found that the average holiday debt held by Americans in 2022 amounted to $1,550. This is a 24% uptick from the average holiday debt in 2021. It the highest amount of average holiday debt carried by Americans in eight years.
Bankruptcy when you cannot pay your debts
When you cannot pay back what you owe in credit card debt this holiday season, and you are already facing other outstanding debts that you simply cannot reconcile, the time may come to consider bankruptcy.
Bankruptcy has a bad reputation. But this reputation is not deserved.
You will not lose all of your possessions if you file for bankruptcy. In fact, many of your possessions cannot legally be sold off in a Chapter 7 bankruptcy and a Chapter 13 bankruptcy lets you retain your possessions.
While it is true that your credit will take a hit if you file for bankruptcy, this hit is temporary. Once over, the bankruptcy is wiped from your record. A temporary hit to your credit is better than facing calls from debt collectors, having possessions repossessed or even facing foreclosure.
In the end, filing for bankruptcy can free you from many of your debts, giving you the ability to move forward burden-free in 2023.