How should I handle my rising credit card debt during the Coronavirus Pandemic in NYC?

Take it from us; runaway credit card debt is one of the main reasons many people file for bankruptcy in NYC.  Sadly, for many New Yorkers already living paycheck to paycheck, it won’t be long before their cards start maxing out, and they become dangerously overextended thanks to the Co-Vid19 health emergency.  But with this crisis, many credit card providers are offering new debt relief programs to help consumers make their ends meet. If you are struggling with your credit card debt and have been thinking about calling a bankruptcy attorney, first consider the options that may be available through your bank or credit card provider.  We are currently steering many clients back to their credit card companies in the hopes they can avoid filing for bankruptcy temporarily or maybe altogether.

The assistance programs vary from bank to bank and among credit card providers.  Many of the banking websites are still developing, and some have little more than an FAQ on their website.  Card companies may not be advertising all the options. Nevertheless, we are finding many lenders are already offering credit increases, deferred payments, reduced fees, payment plans, and even refunds on late payments- but all on a case by case basis.  You will need to call your card issuer directly to talk about your specific debt situation.  Getting through to anyone right now will be tough, but if you are prepared and patient, it will probably be worth it.  And since we are all supposed to be at home right now, what better time to try.

So, if you are willing to wait on hold for a while, you should know what to say when you finally get someone on the phone. The first advice we give our clients is to see if their card company would be willing to allow them to skip a payment for a month or more.  Some institutions have already indicated they are eager to do this, including Bank of America.  If the card company agrees to a postponement, be sure to ask about whether they will be waiving the interest accrued during this time as well. If your lender refuses to defer your payment altogether, they might still agree to lower your interest rate, waiving late fees on your upcoming payments, or removing any penalty adjustments during the outbreak.  Be sure to ask about all these options directly.

This relief will not be enough for everyone.  The bank programs are not a magic wand, but they could give some temporary relief to stave off bankruptcy if credit card debt is your primary financial problem.  For many of our clients, however, credit card debt is only the tip of the iceberg.  The bank relief programs and federal help will only go so far if you have lost your job, have substantial medical debts, or had to close a business.  We get it.  Sometimes the only way to get the fresh start you need is by filing Chapter 7 or Chapter 13 bankruptcy.  Take some comfort in knowing that right now, you are not alone.  COVID may be the worst financial crisis in any of our lifetimes. There are a lot of people feeling the same pain, and the landscape around debt relief is changing fast.

If you don’t feel like you are getting anywhere with your credit card provider and are overwhelmed by your other debts, then we are here to help.  If you live in New York and are not sure how to get the debt relief you need, please contact our offices at 212-244-2882 or [email protected].   We can weigh your options up to and including filing for bankruptcy during a free phone or virtual consultation. We are a leading bankruptcy law firm in New York City, working every day with New Yorkers who have fallen on hard times.

If you like reading check out one of the articles I wrote for Forbes at https://www.forbes.com/sites/forbesbusinesscouncil/people/williamwaldner/#28bb54fc672a

William Waldner