Bankruptcy and Credit Card Debt Relief
Credit card debt can feel like an overwhelming thing, especially if there are creditors seeking repayment contacting you and making your life more difficult. Chapter 7 bankruptcy was designed to provide those who qualify with some relief from credit card debt and other unsecured debts.
If you are transferring your credit card debt from one card to another, and feel trapped in an endless cycle of payments, or if you are nervous about answering the phone in case there will be creditors on the other end of the line, you are not alone.
Many people in those circumstances have looked to bankruptcy to get them back to a manageable lifestyle.
If you want to know more about how Chapter 7 bankruptcy might improve your situation, one of our sponsoring bankruptcy lawyers can provide a free case evaluation. Simply fill out the form below to connect for a free, no-obligation consultation.
Chapter 7 Bankruptcy was Designed to Provide Consumers with Debt Relief
In a Chapter 7 bankruptcy filing, a debtor goes through what is called liquidation. Liquidation means the bankruptcy trustee may sell off non-exempt assets to pay creditors, and the debtor gets relief from many unsecured debts that aren't associated with physical property, like credit card debts and medical bills.
Not all property is up for grabs, though. Each state provides a set of bankruptcy laws called exemptions, which protect certain assets. These may cover the debtor's home, income, retirement savings, furniture, clothing and more. A local attorney can explain exactly what might be protected if you file Chapter 7 bankruptcy.
Chapter 7 bankruptcy may be an option for those with significant credit card debt, medical bills or payday loans. These debts could be discharged in a Chapter 7 bankruptcy, which means that a debtor is no longer responsible for their repayment.
Chapter 7 is often filed by those with little regular monthly income, due to unemployment or significant drop in income due to illness or divorce.
A Chapter 7 bankruptcy can also offer relief from creditors. When a bankruptcy petition is filed, an automatic stay kicks in. This court order prevents creditors from seeking loan repayment, and it can freeze actions in a lawsuit.
Chapter 13 and Credit Cards
Chapter 13 bankruptcy can also help address credit card debt.
In a Chapter 13 case, the debtor enters into a three-to-five year repayment plan. Typically, any secured debts, such as mortgage debt or a car loan, are given priority in this plan.
In many cases, credit card debts and other unsecured debts will be greatly reduced or even left out of the plan, if there is not enough income available to address them.
Receive a Free Evaluation From a Bankruptcy Lawyer
A bankruptcy lawyer can answer your questions about credit card debt relief and other aspects of personal bankruptcy. For a free consultation and evaluation of your case, simply fill out the form below.