(518) 782-9100
 12 Cornell Road, Latham NY, 12110
Call for your Free Consultation
Barbaruolo Law Firm
  • Services
    • Bankruptcy Relief Services
    • Chapter 7 Bankruptcy Services
    • Chapter 13 Bankruptcy Services
    • Mortgage Modification
    • Wage Garnishment Services
  • About Us
    • Blog
    • Testimonials
    • Who We Are >
      • Paula M. Barbaruolo, Esq.
  • Contact
  • Services
    • Bankruptcy Relief Services
    • Chapter 7 Bankruptcy Services
    • Chapter 13 Bankruptcy Services
    • Mortgage Modification
    • Wage Garnishment Services
  • About Us
    • Blog
    • Testimonials
    • Who We Are >
      • Paula M. Barbaruolo, Esq.
  • Contact

Bankruptcy Blog

5/13/2021

4 Comments

Filing Bankruptcy on Credit Cards

 
Picture

Can I file bankruptcy on credit cards?

​Yes, you can file bankruptcy on your credit card debt. In fact, most bankruptcies that are filed include general unsecured debt such as credit card debt. An unsecured debt is one that is not attached to collateral. For example, an auto loan is secured by the automobile that was purchased using the auto loan funds. Most credit cards are unsecured.

How to file bankruptcy on credit cards?

​When a bankruptcy petition is filed, the bankruptcy schedules require that all debt is listed, including credit card debt. Since credit card debt is a general unsecured debt, in most cases, the requirement to pay the credit card debt will be discharged at the end of the bankruptcy proceeding.

Credit Cards and Chapter 7

There are many financial reasons that people file for chapter 7 bankruptcy relief including crushing credit card debt. Credit cards companies can require monthly payments that are greater than you can afford to pay and you end up having to use your credit cards for basic living expenses such as food and gas. Paying only the minimum payments required can cause you to get deeper into debt.

​Interest, finance charges and late fees can quickly add. Are you making minimum credit card payments payments and the amount you owe is not decreasing? This is a difficult trap to get out of. Unlike other unsecured debt such as personal loans, which have a fixed amount due each month and a defined end date, the payments on credit card debt is revolving and there is no end date until it is paid off. This can take years or even decades depending on how much is owed, the interest rate charged and the monthly amount you pay over the required minimum payment. A credit card company may even raise your interest rate if your payments are late or missed. Unpaid credit card payments can lead to collection attempts, lawsuits, money judgments and wage garnishments.

Discharging Credit Card Debt in Chapter 7

Once a chapter 7 is filed, the bankruptcy protection, also known as the automatic stay, kicks in and your creditors must stop collection activities. A chapter 7 bankruptcy will allow you to discharge the debt owed to your credit card companies and other unsecured creditors so that you will no longer be required to pay them each month thus freeing up cash for your living expenses. A chapter 7 will also discharge other unsecured debt. Once the Bankruptcy Court issues a discharge ​of debts, those creditors can no longer collect on the debt thus providing you with the fresh start you need.

Credit Cards and Chapter 13 Bankruptcy

​Credit card debt can also be included in a chapter 13 reorganization. A chapter 13 is a repayment plan that can be used to help people catch up on past due secured debt obligations such as mortgage payments, car payments and property taxes. Chapter 13 reorganizations can run between three and five years depending on a number of factors. General unsecured creditors such as credit card companies are not entitled to receive direct payments on their debts and are only entitled to receive a distribution under the chapter 13 reorganization plan  under certain circumstances. Upon completion of the chapter 13 proceeding, the Court will issue a discharge of debts and any unpaid balance owed to the unsecured creditors is no longer collectable.

Credit Cards after bankruptcy

​It is possible to obtain new credit after a bankruptcy discharge although it is unlikely that a credit card will be approved while a bankruptcy is pending. Some credit card companies offer secured credit cards. A secured credit card requires you to pay a certain amount of money to the credit card company which holds the funds a security for the credit line. If default on the credit card payment, the deposit will be used to pay it.  A secured card may be a good way to help rebuild your credit after a bankruptcy filing. Look for cards that have low deposit requirements and low interest rates. Be careful not to fall into the minimum payment trap again. Be sure to make timely payments and using the card only for items that you know you can afford to pay for at the end of the billing cycle.

How long after bankruptcy can I get a credit card?

​How long you can get a credit card after bankruptcy depends on a number of factors unique to your situation and the credit grantor’s requirements. It is unlikely that you will be approved for a credit card while your bankruptcy is pending. If you file a chapter 7, the proceeding usually takes about four to six months to conclude.The bankruptcy filing will initially harm your credit score. However,  you debt to income ratio should have drastically improced once your dischargeable debt is no longer owed. You can apply for credit anytime after the discharge is granted. Generally, it is easier to obtain a secured credit card after a bankruptcy filing than a regular unsecured credit card. In order to help rebuild your credit, it is imperative that you make your debt payments on time and not carry large balances on revolving debt.
4 Comments
George Adkins link
1/18/2022 03:04:36 am

Very interesting post! Most people file for bankruptcy because of pending credit card debt and medical bills. In my opinion, it is advisable to file a Chapter 7 bankruptcy case, which may help to eliminate practically all credit card debt. However, getting a card after bankruptcy is complicated, and you must improve your credit score to be eligible for a new credit card.

Reply
Credit Restoration link
9/6/2022 05:13:27 am

To avoid this kind of happening people should get help from a credit repair agency.

Reply
Paul Garrett link
11/4/2022 07:40:44 am

Exist glass bar which plant would for. Million letter water course.
Total occur but note fish style debate. Place what yeah bad. Management box realize table my.

Reply
bancobajio
1/23/2023 08:44:00 am

Gracias a estos productos, el prestamista se garantiza el pago en el caso de que se produzcan una serie de circunstancias. Por otra parte, el deudor adquiere la tranquilidad de que su préstamo quedará atendido y no tendrá los problemas característicos de un impago.
<a href="https://www.bb.com.mx/" rel="nofollow ugc"></a></p>

Reply



Leave a Reply.

    Categories

    All
    In The News

    RSS Feed

Barbaruolo Law Firm, P. C.
12 Cornell Road
Latham, NY 12110
Phone: (518) 782-9100
Fax: (518) 782-9101
Email: info@pmblawpc.com
Picture
Picture
Picture
Picture
Picture
Picture

Areas Serving
Albany
​Clifton Park
Saratoga
Schenectady
Troy
Services​
Bankruptcy Relief
Chapter 7
Chapter 13
Mortgage Modifications
Wage Garnishment
Helpful Links
Bankruptcy Terms & Definitions
Should you file for bankruptcy?
How to choose a bankruptcy lawyer

DISCLAIMER
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The information you obtain on this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. Please call or email us to set up your free consultation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until we have established a relationship.