If you are considering declaring bankruptcy because of mounting consumer debt, you are not alone. The average American household has over $16,000 in credit card debt, according to CNBC. Despite the fact that so many people use the cards on a regular basis, there remain countless misconceptions about the process. If you are struggling with accumulating bills, here are answers to a few of the most frequently asked questions on the subject. 

Common Concerns About Credit Card Debt 

How Long Do You Have to Pay Off a Credit Card Balance?

Credit cards provide what is known as revolving credit, which means there is no set deadline for paying off their balances because such amounts can change from month to month. Instead, you must make minimum regular payments. If you stopped using a particular card and focused solely on paying it down, you could clear it within a few months to a few years depending on the total balance, the interest rate, and the amount of each payment. 

What Will Happen if You Stop Making Regular Payments?

If you cannot make even the minimum monthly payment, the lender will likely apply late fees and additional charges, like a penalty APR. Anything over 30 days late will appear on your credit report as a negative remark and can affect your score. In the meantime, the debt will continue to grow, and the lender will begin harassing you for payment. Eventually, the credit line can be frozen, and the creditor will sell the account to a collection agency. In some cases, declaring bankruptcy long before reaching this point is the best approach for protecting your financial health. 

How Much Consumer Debt Can You Consolidate?

In general, there is no set limit for consolidating debt. Every case is different because everyone has unique financial circumstances; however, even if you can consolidate 100% of the debt does not necessarily mean that you should. If one account has a promotional APR, for example, it may be wise to continue paying down that account separately while consolidating other accounts that have higher rates. 

Can You Take Out a Home Equity Loan to Pay Down Credit Cards?

Most financial experts advise clients to avoid taking out a home equity loan to pay down unsecured debt. Doing so puts them at risk of foreclosure if they are unable to make regular payments on the loan. Remember, falling short of what you owe will not necessarily affect your living situation as long as you continue covering the mortgage. 

If you have more credit card debt than you can reasonably pay off, turn to Robert A. Schwartz. Based in Rochester, NY, this seasoned debt relief lawyer will help you explore all the options without judgment to determine the most strategic approach for regaining your financial footing. Visit the firm online or call (585) 334-4270 to schedule a free bankruptcy evaluation today.