Credit Card Debt and Bankruptcy | The Basics
In today’s economy where high-interest credit cards remain one of the largest issues, Coloradans face in their fight for financial health. It should come as no surprise to learn then, that overwhelming credit card debt is still one of the main reasons consumers are forced to file for bankruptcy.
When a credit card account has been delinquent for more than 180 days, banks will charge off what is owed as “bad debt” and sell the account to a debt collector who will call, the debtor, harass them, and in some cases, they may even try to sue them if the amounts owed are high enough.
Because of this many people start looking for help, or wishing they could hit a ‘Reset’ button for their finances. The Good News is you can.
Credit Card Debt is Dischargeable in Bankruptcy
Not only are your credit card balances dischargeable, but so are your medical bills, and other unsecured debts as well.
Creditors are required by law to decrease your balances owed to $0 upon filing for bankruptcy. Meaning you do not legally owe these bills any longer.
Fraud Will Prevent Credit Card Debt From Being Discharged
However, please be aware that fraud will prevent your credit card debt from being discharged. After you file, do not use your credit cards, nor just before either.
Basically, any use of credit cards with the intention of not paying back the debt is fraudulent. The bankruptcy code protects debtors who behave in good faith but will punish debtors who try to game the system.
Will I be Able to Get a Credit Card After Bankruptcy?
Absolutely! There are a great number of credit card companies that have cards specifically designed for people rebuilding their credit after bankruptcy. They see you as having less debt, more ability to pay, and unable to file for bankruptcy again for another 8 years at least.
The Bottom Line
The bottom line is that as long as you’re acting in good faith, Most if not all of your unsecured debt including credit card and medical bill debt will be discharged in a bankruptcy filing.
If you’re facing mounting credit card bills and feel yourself spiraling out of control, and have questions about Credit card debt and bankruptcy. Then please feel free to fill out the form below, or for more pressing concerns you can always give us a call at 720-515-9887.
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