Can Credit Card Debt be Eliminated in Bankruptcy?

Individuals file bankruptcy relief for several reasons. In the majority of cases, the individual has experienced a long-running financial hardship that eventually resulted in their inability to pay off their debts. If you have been struggling to pay off your debts, filing Chapter 7 bankruptcy might turn out to be a help, but that must be ensured by only an experienced bankruptcy attorney.

Do you want to file for bankruptcy due to a mounting credit card debt?

Filing Chapter 7 bankruptcy can be helpful erase your credit card debts. If your credit card debt is something you think you can’t pay off any longer, Chapter 7 bankruptcy might help you get back on your back again. If you have been making the only minimum payment on your credit card, it might take you 10 to 15 years to repay the credit card liabilities, based on the balances on your credit card and interest rates.

Usually, making only minimum payments could cost you thousands of dollars extra that you never used. Moreover, if you miss a single payment, the credit card company will significantly raise the interest rate. For most Americans, credit card debts and medical debts are the two main reasons they see debt relief. 

Credit card debt is an unsecured debt

Credit card debt is basically considered unsecured debt, meaning you never have property or assets securing the amount that you ever owe. Contrary to this a secured debt is a mortgage. Hence, when you default on your mortgage payment, your lender reserves all the rights to take your property leveraging foreclosure to pay off the remaining amount you owe. With unsecured debt, such as credit card debt, however, if you fail to pay it off, the credit card company doesn’t reserve any right to repossess your property or even foreclose it. Rather, you are on a hook to repay the money you owe.

Chapter 7 bankruptcy helps eliminate credit card debt and also judgment debts

When you file for Chapter 7 bankruptcy, it incorporates almost all your debts. Chapter 7 bankruptcy case helps eliminate most financial liabilities, including personal judgments from debt collection lawsuits and credit card debts. You are offered a bankruptcy discharge if you successfully complete the Chapter 7 case. Upon the successful completion of the Chapter 7 bankruptcy case, you are likely to be relieved of your liability to repay the debt. In simpler words, when a debt is eliminated in bankruptcy, you no longer have to repay the debt you owe. Your creditor will no longer be allowed to take any form of action against you to collect an eliminated debt.

Certain examples of debts, eligible for elimination in Chapter bankruptcy include:

·         1. Personal judgments

·         2. Credit card debts

·         3. Utility bills

·         4. Medical bills and debts

·         5. Old rent or lease payments

How do you know if you qualify to file a Chapter 7 bankruptcy case?

You should always consult with an experienced attorney if you have been considering filing a bankruptcy petition for your credit card debt. An attorney will be able to guide and also represent your bankruptcy case in the most effective manner to ensure a maximum number of debt elimination.

Recovery Law Group offers you the best bankruptcy attorney in Sacramento.  Consult us TODAY!

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Created on Dec 27th 2021 06:41. Viewed 213 times.

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