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Credit card cash advances can be costly

| Jan 29, 2021 | Bankruptcy

The past year has been financially difficult for many Floridians. It’s understandable that people may have looked into many different financial options to meet their needs, including credit card cash advances.

Although a credit card cash advance may help meet financial obligations temporarily, they can be very costly. Essentially, the advance allows a person with a credit card to take money out of an ATM, but it isn’t free. It is a loan that must be paid back.

The bank or other financial institution often charges a fee for the advance and the loan may also accrue interest. Unfortunately, this can lead to a cycle of borrowing money that cannot be repaid.

As a result, consumers who are facing financial difficulties may consider filing for bankruptcy.

Florida bankruptcy

It is helpful to know that bankruptcy offers consumers options to eliminate their obligation to pay most or all debts. This is also known as a discharge.

It may also stop a foreclosure on a home, stop wage garnishment and prevent utility services from being terminated. If the consumer has a mortgage or a car loan, it may help to lower the payment of those debts as well.

If a borrower has student loans, it is unlikely that those will be discharged in bankruptcy. However, the bankruptcy may create an automatic stay. This means that the student loan company may be prohibited from collecting on the debt.

It is important that bankruptcy is filed in good faith. Borrowers who transfer or conceal property or incur new debts knowing that they are filing for bankruptcy could face penalties.

An experienced attorney can provide guidance to individuals about the types of bankruptcy and whether it is the right option for their circumstances.

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