Is credit card debt erased by filing bankruptcy in Oregon?

If you are filing for bankruptcy in Oregon and are dealing with a mountain of credit card debt, you may wonder if it can be erased. It is important to understand that no debt is going to be simply erased or vanish. However, there are certain debts that can be discharged in bankruptcy, meaning those debts become uncollectible. This only occurs, though, after some effort has been made to get creditors their money.

The specific way in which bankruptcy will handle your credit card debts can vary depending on which chapter of bankruptcy you file, so it is important to understand exactly how your credit card debts will be dealt with under each of the relevant chapters in Oregon.

Under chapter 7, your credit card debts will be discharged, so you might consider this as the debts being erased. However, this does not happen until after you have been required to list your assets and have those assets sold. While you can keep some of your exempt assets, like some home equity, this means that the debt is erased (but at a cost and only after as much has been paid back as possible by the sale of your possessions). You also have to qualify to file for chapter 7 by proving your income is not sufficient to pay off your credit card debt.

Under chapter 13, your credit card debts don't just get erased. Instead, you repay them over a 3-5 year period through a repayment plan overseen by the court. Your monthly payment about towards your credit card debt is determined by your income. 

To determine which chapter of bankruptcy you are eligible for and what effect it will have on your credit card debt, you should strongly consider speaking with a bankruptcy lawyer in your area.