How Chapter 7 Bankruptcy Erases Credit Card Debt

Chapter 7 bankruptcy credit card debt removal can help individuals who are struggling to get by and pay their bills due to excessive debt. Chapter 7 enables debtors to completely erase all credit card debt under most circumstances. There are some positive and negative implications to filing for bankruptcy. You should be aware of how bankruptcy will impact your future before making the decision to file.

Pros to Filing Chapter 7

You should consider the following benefits of filing for chapter 7 bankruptcy before making the choice to file:

• Put an end to phone calls and mail from creditors caused by unpaid bills;
• Eliminate potential law suits from creditors who are included in the bankruptcy;
• Some property can be protected during bankruptcy (consult an attorney to find out how);
• Relief of financial pressure will make your life less stressful; and
• Completely erase all debts included in the bankruptcy, allowing you a fresh financial start.

Cons to Filing Chapter 7

You should also think about the down sides of filing for chapter 7, including:

• It may be difficult to obtain credit after bankruptcy, including car loans, credit cards and other types of credit;
• Your bankruptcy will remain on your credit report for up to 10 years;
• It may be difficult to rent a house;
• Loss of credit cards;
• Some debts may not be discharged;
• You may be required to place a deposit when acquiring services for cell phones and household services; and
• You may lose unprotected assets and possessions such as a house when filing for bankruptcy.

Not all property may be included in your bankruptcy. Property that cannot be included in bankruptcy may include (but is not limited to):

• Overdue alimony or child support;
• Student loans, unless the circumstances warrant it and the court allows it;
• Taxes are usually not included except in rare circumstances; and
• Court imposed judgments, including judgments stemming from fraudulent or criminal conduct.

Also, creditors have the right to challenge your petition to discharge their debt. If there is any activity on your account that appears questionable such as recent cash advances, the court may not discharge the debt if challenged.

Getting Legal Help

If you are facing serious debt problems, filing for bankruptcy may be a way to get your life back on track. Discuss your situation with a bankruptcy attorney in your state to find out if this option is right for you. An attorney can help you assess your debt and decide if bankruptcy is right for you. If you decide to file for bankruptcy, having an attorney handle the paperwork and assist you in the proceedings will make the process much more manageable.