Credit card debt is one of the many types of debt that is eliminated by filing bankruptcy. However, there are certain instances in which credit card debt may not be discharged, such as if the credit was obtained by fraudulent means or the debt was for luxury items or cash advances.
Credit Card Debt Is Dischargeable
The bankruptcy code provides a specific of list of debts that are not dischargeable in bankruptcy. When it comes to credit card debt, it is considered dischargeable unless it falls into one of the following categories.
Fraud
If you acquire credit by providing false information, fraudulent documentation, or any other inaccurate representation, the debt incurred will not be dischargeable. This is true for credit card debt as well as other forms of credit. For example, if you provide inaccurate income information in order to get approved, the debt incurred may not be dischargeable.
Luxury Goods
Luxury goods or services obtained within 90 days of filing bankruptcy may not be dischargeable if the debt is owed to a single creditor and total more than $500. This does not apply to debt incurred that is necessary for the support of the debtor or dependents of the debtor, only “luxury goods and services”.
Cash Advances
If you take cash advances from your credit card totaling more than $750 within 70 days of filing bankruptcy, it will more than likely be non-dischargeable. Within this time period, a debtor is considered to already be insolvent and any cash advances are assumed to be taken with the knowledge of an imminent bankruptcy.
Seeking Legal Advice
If you are considering filing bankruptcy and have questions about what debt is dischargeable, you should seek the advice of a licensed attorney that specializes in bankruptcy law. Because bankruptcy is a very precise area of law, a specialist will be more advantageous than a general practitioner.
