Bankruptcy Laws on Credit Card Debt

Bankruptcy laws have helped many debtors discharge thousands of dollars in unsecured debts such as credit card debts. The purpose of federal bankruptcy laws is to allow an honest debtor a new start. When credit card debts or other unsecured debts become more than a debtor can handle, it may be time to look at bankruptcy as an option.

Bankruptcy and Credit Card Debt

There are two main types of bankruptcy that individual debtors (and couples) utilize. Chapter 7 and Chapter 13 bankruptcy can be used by debtors in a variety of situations. Chapter 7 is generally reserved for debtors whose income is either low or non-existent and who have little assets. Chapter 13 may be used by a debtor who makes a considerable or moderate income or has some assets to protect. A lawyer can advise you of the best bankruptcy option given your asset and income situation.

Once a debtor files for bankruptcy, the calls and legal actions of creditors are halted until the outcome of the case is determined. Getting to this place provides many debtors with peace and calm that they have lost due to mounting debts.

Some debts that may not be discharged in bankruptcy, depending on the specific facts of a case, include:

• Recently acquired debts (within sixty to ninety days) that may have been in contemplation of bankruptcy;
• Student loan debts generally (unless undue hardship can be proved);
• Tax debts generally cannot be discharged;
• Child support or spousal support that is court ordered; and
• Other debts ordered by a court such as personal injury settlements and criminal judgments.

Because the law is complicated, it is wise to get the help of an attorney in assessing your debts if you have any questions as to whether a particular debt can be discharged. Bankruptcy law allows for relief from many unsecured debts such as medical bills, credit card debts and other loans that are not secured by a debtor's property. Getting out of credit card can be an excellent way to start new.

Getting Legal Help

Because bankruptcy is a serious and life altering process, it is vital that you speak with an experienced bankruptcy attorney before committing to any action. An attorney can give you a professional assessment of your situation and help you look at your finances more carefully. Lawyers are experienced in analyzing and solving problems like yours.