Are You Already Dreading Your Holiday Credit Card Bills?
The holidays are coming fast. For many families in Bullhead City, Kingman, and the whole Tri-State area, that means a lot of joy. But it also means a lot of pressure. Pressure to buy the best gifts, host the perfect meal, and travel to see family.
And all of that costs money.
The truth is, many of us go into debt every holiday season. A 2023 study found that 35% of Americans took on holiday debt, and the average amount was over $1,000. That’s a huge burden to carry into the New Year.
Maybe you’re reading this and you still have debt from last Christmas. Maybe you’re looking at your credit card balance and you just know that this holiday season is going to push you over the edge. You’re not bad with money. You’re just stuck.
At Knochel Law Offices, we’ve helped people in this community find a fresh start for over 35 years. We want to talk about that sinking feeling. And, more importantly, what you can do about it. When is it time to stop stressing and consider filing for bankruptcy?
What Are the Warning Signs That My Debt is a Serious Problem?
Holiday debt is usually the tipping point, not the whole problem. It’s the final straw that breaks an already strained budget.
Here are the warning signs our team sees every day. Do any of these sound familiar?
- You’re Using Credit Cards for Necessities: You aren’t just using your Visa for gifts. You’re using it for gas to get to work or to buy groceries.
- You’re Only Paying the Minimum: You look at your $5,000 credit card bill and you can only afford the $100 minimum payment. At that rate, you could be paying for 10-15 years and pay thousands in interest.
- You’re Juggling: You use a cash advance from one card to make the minimum payment on another card. This is a classic sign the debt is out of control.
- You’re Getting Calls from Collectors: Your phone rings all day. You’re afraid to answer.
- You’ve Lost Sleep Over Money: The stress is affecting your health and your family. This is a huge sign that you need a new solution.
If you’re just stressed about paying off a $500 gift card, bankruptcy probably isn’t the answer. But if that $500 is being added to $20,000 in medical bills, old credit card debt, and a car repossession, it’s time to look at your options.
What is Chapter 7 Bankruptcy and How Can It Help with Holiday Debt?
When most people think of “bankruptcy,” they’re thinking of a Chapter 7 bankruptcy.
Think of Chapter 7 as a “fresh start.” It’s designed to wipe away (or “discharge”) your unsecured debts.
What’s an unsecured debt? It’s any debt that isn’t tied to a specific piece of property. The best examples are:
- Credit card bills (like all those holiday gifts)
- Medical bills
- Personal loans
- Payday loans
- Old utility bills
A Chapter 7 bankruptcy can legally erase all of this debt. Yes, all of it. In about 90-120 days.
Imagine starting the New Year with a $0 balance on those credit cards. Imagine the collector calls stopping immediately. That’s what the “automatic stay” in bankruptcy does—it’s a legal order that stops all collection efforts the moment you file.
This isn’t “giving up.” It’s using a legal tool that was created to help honest, hardworking people (like you) get out from under a mountain of debt they can never repay.
But What Happens to My House and My Car in a Chapter 7?
This is the biggest fear people have. “Will I lose my home in Bullhead City? Will they take my truck?”
This is where you really need to talk to an experienced bankruptcy lawyer “near me.” You can’t rely on what you read on the internet.
Arizona has laws called “exemptions.” These laws protect your property.
- The Homestead Exemption: In Arizona, you can protect up to $400,000 of equity in your primary home. (See Arizona Revised Statute § 33-1101). Equity is the value of your home minus what you owe. Since most people in our area don’t have that much equity, their home is 100% safe in a Chapter 7.
- The Motor Vehicle Exemption: You can protect up to $15,000 of equity in one car. If you’re married, you can double that.
- Other Exemptions: There are also exemptions for your personal belongings, tools of your trade, and your retirement accounts (like your 401k or IRA).
For the vast majority of people we help, they keep their house, keep their car, and get rid of all their credit card and medical debt.
When Should I Consider Filing for Bankruptcy?
Here’s the honest answer: You should consider it when the stress of your debt is costing you more than the debt itself.
Are you losing sleep? Is it hurting your marriage? Are you afraid to answer the phone? Is all your extra money going to interest payments instead of your savings or your kids?
Filing for bankruptcy isn’t a sign of failure. It’s a sign that you’re smart enough to use a legal tool to get your life back. The U.S. government created the bankruptcy code to give people a second chance.
Don’t let one or two more holiday seasons bury you. You don’t have to live with that sinking feeling of dread. Talking to a lawyer doesn’t mean you have to file. It just means you’re finally getting real, honest answers about your options.
Key Takeaways for Holiday Debt & Bankruptcy
- You’re Not Alone: Millions of people go into debt over the holidays. For many, it’s the tipping point on an already strained budget.
- Know the Warning Signs: If you’re using credit cards for gas and groceries, only paying minimums, or losing sleep over money, it’s time to get help.
- Chapter 7 is a Fresh Start: Chapter 7 bankruptcy is a legal tool designed to wipe out unsecured debts like credit cards, medical bills, and personal loans.
- You Can Protect Your Property: Arizona’s “exemption” laws are generous. Most people who file for Chapter 7 keep their house and their car.
- Don’t Wait for a Lawsuit: The best time to act is before a creditor sues you or garnishes your wages.
Stop dreading the holiday bills. Come talk to our team at Knochel Law Offices. We’ve been helping your neighbors in Bullhead City, Lake Havasu, and Kingman find financial peace of mind for over 35 years.
5 Common Questions About Bankruptcy
- Will filing for bankruptcy ruin my credit forever? No. This is the biggest myth. In fact, many people have a better credit score just one or two years after filing. Why? Because you’ve wiped out all your debt. Your debt-to-income ratio improves, and you can start fresh. You will be able to get a car loan and a credit card again, often much sooner than you think.
- Do I have to include all my debts? Can I keep one credit card? No, you cannot pick and choose. You must list all your debts in your bankruptcy petition. You can’t pay back your brother or your favorite credit card and wipe out the rest. This is a common mistake that can get your whole case thrown out.
- Will my friends, family, and employer find out? It’s very unlikely. Bankruptcy filings are public records, but it’s not like the court takes out an ad in the newspaper. Someone would have to go looking for it. Your employer will not be notified unless they are one of your creditors (for example, if you have a 401k loan).
- What’s the difference between Chapter 7 and Chapter 13? Chapter 7 is the “fresh start” that wipes out debt, and it’s what most people use. Chapter 13 is a “reorganization.” You use it if you make too much money for a Chapter 7 or if you are behind on your house or car payments and want to catch up. You enter a 3-5 year payment plan. We can tell you which one is right for you in a consultation.
- How much does it cost to file for bankruptcy? There are two costs: the court filing fee (which is set by the federal government) and the attorney’s fee. We offer a free consultation to review your case and can give you a flat-rate quote. Often, the cost of filing is far, far less than even one or two months of your minimum debt payments.
