How Bankruptcy Can Clear Credit Card Debt
The average family has $6.300 of credit card debt, according to the most recent Survey of Consumer Finances by the Federal Reserve. For some households, the amount of credit card debt is crushing. This leads many people to wonder, “Can you file bankruptcy on credit cards?” Most often, the answer is “yes.” Here, we discuss how to get rid of credit card debt with bankruptcy.
Credit Card Debt in Chapter 7 Bankruptcy
Filing bankruptcy on credit cards is one of the most common reasons why people seek out a chapter 7 discharge bankruptcy. As unsecured debt, credit card debt can often be wiped out entirely during the bankruptcy process, along with other unsecured, non-priority debt like medical bills and personal loans.
To file chapter 7 bankruptcy, you must pass the means test. You must make less money than an average family of the same size in North Carolina. Otherwise, you must show that you do not have sufficient income to pay your debt when factoring in your personal expenses.
An experienced bankruptcy lawyer can evaluate your situation and determine if you qualify for chapter 7 bankruptcy.
Credit Card Debt in Chapter 13 Bankruptcy
If your income is too high, you may qualify for chapter 13 bankruptcy. In chapter 13 bankruptcy, you enter into a repayment plan that gives you more time to pay off your debt. The plan lasts from three to five years, during which time you may pay off a fraction of non-priority debt. The rest is discharged at the end of the repayment plan’s term.
Can the Credit Card Companies Sue Me After I File for Bankruptcy?
Unless you have taken on new debt, credit card companies cannot usually sue you after you have filed for bankruptcy. Once you file bankruptcy for credit card debt, an automatic stay is applied that prevents creditors from taking further legal action against you to collect unpaid debt.
However, your creditors may object to the discharge of their debt by making legal arguments such as:
- You bought luxury goods or services within 90 days of filing for chapter 7
- You used a credit card for an untraditional use, such as to pay alimony, child support, taxes, or student loans
- You committed fraud when obtaining the credit card
Your bankruptcy lawyer will defend against any such challenges to maximize the amount of debt you can eliminate through the bankruptcy process.
Contact a Bankruptcy Attorney at Sasser Law Firm Today
If you need help filing bankruptcy for credit card debt, Sasser Law Firm can help. We have three board-certified bankruptcy specialist attorneys who know the ins and outs of bankruptcy law. We will work closely with you to determine the best option for you. Our seasoned attorneys can evaluate your financial circumstances and determine whether you qualify for chapter 7 or13. We can also handle all communications with your creditors and establish a plan that works best for you.
You will work directly with a bankruptcy lawyer, not be passed off to a paralegal. We want to help you get a fresh start and eliminate credit card debt once and for all. We offer a free consultation to review your options. Contact us today to get started on your path to financial recovery.
- About the Author
- Latest Posts
For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.