Discharged credit card debt can be accomplished by filing bankruptcy. Chapter 7 allows you to get discharged credit card debt relief and lets you start over by eliminating your debts. However, if you have substantial assets that you want to keep other than your home and your car, you may want to file for a Chapter 13. Chapter 13 allows you to enter into a payment plan with your creditors. Once the plan has been completed by you, the Court will discharge the remaining debt. Both Chapter 7 and Chapter 13 provide for exemptions to keep your home and car, as long as they don’t exceed the statutory amounts.
Another Solution
Another solution to getting rid of your credit card debt is to manage your debt by working out a debt management plan with your creditors to reduce your credit card debt. It will take longer for you to pay off the debt, but it may help you to avoid filing bankruptcy. A credit counselor can help you negotiate a plan with your creditors and assist you with maintaining your credit and working out a budget. There is no fee for credit counseling assistance.
Tips for Avoiding Credit Card Debt
To avoid getting into credit card debt in the first place, here are some tips that may help you:
- Only apply for one or two credit cards with small and manageable limits.
- Avoid department store charge cards.
- Use your ATM debit card, or pay cash whenever possible.
- Pay by check instead of credit card.
- Only use your credit card for an emergency.
- Pay your credit card bill off in full each month to avoid finance charges.
- Pay on time to avoid late fee charges and negative reporting to the credit bureaus by your creditors.
- Always stay within your credit limit.
After Bankruptcy
A bankruptcy stays on your credit history for 10 years, and a bankruptcy alternative debt management plan stays on your credit history for 7 years. After a bankruptcy, it will be more difficult for you to get credit, and you will have to pay higher interest rates. You will be able to repair your credit over time though.
How an Attorney Can Help
Since bankruptcy is a serious matter, it is recommended that you consult with a bankruptcy attorney to find out all your options. The bankruptcy attorney will explain the procedure and the laws to you. The bankruptcy attorney can advise you whether you should file a Chapter 7 or Chapter 13, and prepare the proper forms for filing with the Court.
