If you are struggling to pay your credit card bills while simultaneously “making ends meet,” you are in need of either a debt management or debt relief solution. Filing for bankruptcy is not the ideal financial management approach for every individual’s unique circumstances. Bankruptcy only has the potential to eliminate unsecured debt. As a result, depending on the kinds of debt that you’re dealing with, filing for bankruptcy may not serve as the comprehensive solution that you’re looking for. However, if you are struggling with a significant amount of credit card debt (and especially if you do not earn much income), filing for bankruptcy could provide you with a financial fresh start that will allow you to move forward in a fiscally healthy way, as a bankruptcy lawyer, such as from Chorches Bankruptcy Law, can explain. The ways in which bankruptcy manages credit card debt depend on which type of bankruptcy is being discussed. Two primary kinds of bankruptcy are widely available to consumers throughout the United States: Chapter 13 bankruptcy and Chapter 7 bankruptcy.
Credit Card Debt – Chapter 7 vs Chapter 13 Bankruptcy
If you don’t earn much income, you may be eligible to file for Chapter 7 bankruptcy. If your bankruptcy case is successful, your eligible unsecured debt (including your credit card debt) will be eliminated. Unlike Chapter 13 bankruptcy, Chapter 7 bankruptcy doesn’t require filers to repay any of their eligible debts before those debts can be discharged. If Chapter 7 bankruptcy sounds like a process that is too good to be true, know that it does have its limitations. Secured debt (such as auto loans, home loans, and loans for possessions paid off incrementally in which the object being purchased is treated as collateral) cannot be discharged in a Chapter 7 bankruptcy proceeding. Additionally, if you own any unusually valuable luxury property that isn’t considered “exempt” under state law, the trustee assigned to your case may be permitted to sell that property to repay your creditors before your eligible debts can be discharged.
If you aren’t eligible for Chapter 7 bankruptcy (or you own valuable luxury property that you aren’t interested in having sold to repay your creditors) you may be able to restructure all of your debts (credit card debt included) through the Chapter 13 bankruptcy process. In the wake of a Chapter 13 bankruptcy filing, you’ll be required to repay a manageable amount of your debt on a monthly basis for 3-5 years. At the end of that repayment period, any remaining eligible balances (including credit card balances) will be discharged.
Legal Assistance Is Available
Depending on your unique circumstances, your credit card debt may be managed best via a debt consolidation process, a debt management plan, or a bankruptcy filing. You can explore each option available to you in a risk-free consultation setting with an experienced lawyer. Living under the weight of crushing credit card debt can reach a point at which it feels like going on is impossible. Know that you have options. Call a law firm today to learn more.