NEW YORK (MainStreet) After graduating with a master's degree from a state university in Oregon five years ago, Angela Durand needed to pay back $15,000 in credit card charges she had wracked up while studying.
"I used cash advances from my credit cards to pay for books, food, tuition, clothes and lots of other student sundries," said Durand, who hails from San Diego.
When she accepted a job that paid $35,000 a year, Durand purchased a brand new Hyundai worth $10,000 in order to have transportation to and from work every day, but the additional debt burden proved to be too much.
"Between the car payment, paying monthly credit card bills and daily expenses, I started slipping," she said.
Durand got so far behind in her credit card payments with 14% interest and late fees that she sought assistance from a bankruptcy attorney after losing her job. "Before I knew it,my credit card balance had ballooned to $20,000 just from late fees and interest alone," Durand said.
An Avvo.com study found that 32% cite credit card debt as the reason they filed for bankruptcy, 13% blamed home foreclosure and 12% job loss.
"Decreased income or stagnant incomes that have become so common in this new economy as well as large amounts of credit card debt are primary reasons my clients file for bankruptcy," said California bankruptcy attorney Kelly Zinser.
Largely 64% of consumers file for Chapter 7 bankruptcy, according to Avvo.com.
"I meet with many clients who have been trying to pay off their credit card debt for years, sometimes five years or more," Zinser said. "Bankruptcy filing is relative for each person but most of my clients have at least $30,000 in debt and many have more than $100,000 in debt."