Share:

Credit cards can be useful in many situations, especially in emergencies. However, it’s easy to reach a point where it’s difficult or impossible to repay. In such a situation, you may be able to file for bankruptcy to discharge or minimize the amount you owe on these accounts. If you’re searching for debt relief solutions to cover insurmountable credit card bills, here’s what to know about your bankruptcy options.

Chapter 7 Bankruptcy

How Chapter 7 Bankruptcy Discharges Credit Card Debt

In simple terms, Chapter 7 bankruptcy refers to situations where a select portion of your assets are sold to cover debts, and the remaining balance is discharged. While not all debts are applicable under Chapter 7, credit card balances are valid if they are unsecured and nonpriority. These circumstances apply to most credit card debts.

When You Might Still Be Responsible for Credit Card Purchases

Your credit card debt may not be discharged under Chapter 7 bankruptcy if there is evidence that you used false information to apply for the financing. For example, your account may be considered fraudulent if you lied about your identity or your income.

Existing balances may not be excused if you used the card to purchase $725 or more in luxury goods within 90 days of filing for bankruptcy. Similarly, cash advances of $1,000 or more within 70 days of filing are not dischargeable.

If the Credit Card Is Secured

While rare, credit cards can be secured, or backed by property you own. If you have secured debt and file for bankruptcy, the creditor is entitled to the value of the property that was used as collateral. However, the remaining amount may be discharged.

Chapter 13 Bankruptcy

file for bankruptcyChapter 13 bankruptcy works differently than Chapter 7 in that it restructures your debt so that you repay some of the existing balance. The repayment period is designed to last between three and five years, and your payments are based on your income. After the repayment period has ended, remaining debt on the credit card accounts can be discharged.

 

When you’re dealing with excessive amounts of debt, Bender & Bender can introduce you to options for relief. Specializing in bankruptcy law, this Wisconsin Rapids, WI, firm will help determine if you can file for bankruptcy and which kind to use. These lawyers take a personalized approach, reviewing your circumstances in full and developing strategies to help you discharge viable debts fairly. To learn more about these debt relief solutions, visit the website. Call (715) 423-4400 to schedule a consultation with a knowledgeable personal bankruptcy attorney.

tracking