Adrian Collins Writes About Credit Card Debt and Bankruptcy December 3rd, 2013 Bankruptcy can help you eradicate credit card debt – Is this really possible? Do you have mounting credit card debt? If yes, then you may file for bankruptcy to get out of debt. Usually, people use their credit cards to buy daily items when they do not earn enough. If your car requires some repairs but you do not have money, then you may swipe the credit card for it. Likewise, if you or your family members need medical treatment suddenly, then you swipe your credit cards to pay the bills. You should pay more than the minimum bill on time but if you cannot do so, then you will fall into credit card debt, for sure. It is better if you often calculate your credit card debt since this will enable you to know how much debt you owe. If you cannot pay off the debt on your own, then you may file for Chapter 7 or Chapter 13 bankruptcy to eliminate the credit card debt. Eligibility criteria – What you need to do to file bankruptcy If you want to file Chapter 7 bankruptcy, then in most cases you should have a low level of income in comparison to the same kind of houses in your state. In addition, your disposable income left after paying your monthly bills should also be low. You will need to pass the means test in case for Chapter 7. For individuals who cannot qualify for Chapter 7 bankruptcy, they may qualify for Chapter 13 bankruptcy. People who have a higher level of income can file Chapter 13; however, your unsecured debt should not go beyond $383,175. Chapter 7 bankruptcy – How it helps eradicate credit card debt Your unsecured debt can be discharged when you file for Chapter 7 bankruptcy. In this type of bankruptcy, the bankruptcy court will appoint a trustee who will collect non-exempt property from you and sell those assets to pay any creditors. You need to know exemptions differ from one state to another. Credit card debt belongs to the unsecured, category and non-priority debt which is usually discharged. Chapter 13 bankruptcy – How it helps pay off credit card dues In the case of Chapter 13 bankruptcy, you pay back your creditors either in part or in full, by means of a repayment plan, which lasts for 3 to 5 years. A trustee is appointed in Chapter 13 bankruptcy who reviews your repayment plan and considers the debtor’s income. The repayment plan provides the option for payment of a part of your unsecured and non-priority debt like the credit card debt. Most people who file for Chapter 13 bankruptcy pay a small percentage of their credit card debts and other unsecured debts. After you complete the repayment plan successfully, the part of credit card and other debts, which are yet not paid, will be discharged. When you have excessive credit card debt and you cannot find a way to reduce the debt problem, then filing for bankruptcy may be the right option. If you often calculate your credit card debt, then you will be able to understand how much debt you have and how long you need to pay off. Thus, credit card debt can be reduced or eliminated with the help of bankruptcy.
Posted on: Tue, 03 Dec 2013 16:20:25 +0000
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