Using Bankruptcy for Relief from Credit Card Debt

If you are in over your head with financial troubles, credit card debt relief may be the only way to change the situation. Depending on the type of bankruptcy you file, you can either erase all or some of your credit card debt. Generally, individuals filing bankruptcy either file for chapter 7 or chapter 13, depending on assets, extent of debt and projected income.

Chapter 7 can be used to completely remove all credit card debt if the paper work is properly filed, includes all credit card debts and the court grants the petition. Chapter 13, on the other hand, is used to reorganize debt, and does not completely erase it. This type of bankruptcy is used by individuals who have a fairly good income, but they have more debts than they can pay. If you own a home or other assets that you want to protect during bankruptcy, you will probably file for chapter 13. Discuss your case with an experienced bankruptcy attorney to learn more about the best type of bankruptcy for you to file.

Creditors Can Contest Discharge

You should be aware that creditors can contest any debt discharge. Often times this does not happen, but if you have recently acquired any significant debt, it may bring up a potential creditor claim for fraud or use of the credit card without intent to repay. If the creditor is successful, then the court will not discharge the debt.

The following may cause creditors to contest debt discharge:

• Sudden increase in card use just before filing;
• The card was issued recently;
• Cash advances during the time just before filing;
• Recent use of the card for travel;
• Pattern of using one card to make payments on other cards;
• Going over credit limit;
• Using card without reasonable belief that you can repay debt;
• Large balance; and
• Charges made after talking with a bankruptcy attorney.

Cons to Filing Bankruptcy on Credit Card Debt

Filing for bankruptcy on credit card debt does impact your future. You will likely have difficulty obtaining credit after bankruptcy. Some individuals keep one of their credit cards out of the bankruptcy for this reason. You will have to work to restore your credit after your bankruptcy.

Getting Legal Help

If you are having financial troubles because of excessive credit card debt, bankruptcy might be right for you. To learn more about your options and how bankruptcy can help you, contact a bankruptcy attorney to discuss your case. Bankruptcy attorneys handle the paperwork and procedures for bankruptcy on a daily basis and will be in the best position to advise you of your rights, the best chapter to file, and whether other options are available.