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Cutting a credit card - Orange County bankruptcy attorneyUsing Bankruptcy to Eliminate Credit Card Debt

Have you fallen so behind on your credit card debt that you just cannot get them paid?

If so, continuing to struggle is the worst thing that you can do.

The way the current debt system is set up by companies is meant to keep you in the hole.  The sad truth of the matter is, people in debt are a cash cow for credit card companies because all you are doing is paying off the interest in most cases.

That interest keeps accruing and you can wind up paying four or five times your original debt when everything is finally all paid off—if it ever gets paid off.

Stop Struggling with Credit Card Debt and File for Bankruptcy

If this sounds like something you want to avoid, there is a simple solution for wiping out your credit card debt: file for bankruptcy.  Now while bankruptcy won’t eliminate every type of debt—for instance, your home and car mortgages and child support—it will wipe out almost every other type of credit card debt you have, depending on which type of bankruptcy you file for.

What is the Best Type of Bankruptcy to Eliminate Credit Card Debt?

There are two types of bankruptcy that you’ll want to consider when your goal is to get rid of your credit card debt: Chapter 7 and Chapter 13.  Both have their pros and cons for filing.  Let’s take a closer look at Chapter 7 bankruptcy and Chapter 13 bankruptcy to see which one is better for your situation:

1. Chapter 7 Bankruptcy for Credit Card Debt Elimination.  When you file for Chapter 7 bankruptcy, either most or all of your unsecured debt that is non-priority is wiped out.  Unsecured debt means debt that is not attached to a property such as a car or house.  Unsecured debt includes things like medical bills, utility bills, payday loans, purchases, etc.  Some priority loans won’t be able to be eliminated through Chapter 7 including student loans, some tax debts and child support.  You also cannot eliminate debt that is tied to credit card fraud.

In exchange for wiping out most or all of your unsecured, non-priority debt, you will give up your remaining nonexempt property so that it can be either sold off and the money distributed to your lenders or given to your lenders so they can sell it off.  If you have no nonexempt property, your debts are simply wiped clean.

2. Chapter 13 Bankruptcy for Credit Card Debt Elimination.  Chapter 13 bankruptcy is a bit different from Chapter 7 in that you agree to pay a small percentage of your credit card debt that is based on your disposable income.  After you pay this portion of your non-priority, unsecured debt, the remaining debt is wiped off.

For most people who file for Chapter 13 bankruptcy, only a small percentage payment of your overall debt is all that it takes to eliminate outstanding debt.  This payment play is usually set out over 3 to 5 years, giving you time to get back on your feet and eventually out of the hole, debt free.  The main benefit with Chapter 13 bankruptcy is that you can keep your nonexempt property.  It can also stop a stop a mortgage foreclosure and allow you to reduce debt on a property to more accurately reflect the actual value of said property.

Will My Creditors Stop Harassing Me after I File for Bankruptcy?

Whether you file for Chapter 7 or Chapter 13 bankruptcy, your creditors and lenders are legally bound to not pursue collection efforts through any means by order of an automatic stay.  This automatic stay also prevents you from being sued for filing for bankruptcy.

To find out how you can file for Chapter 7 or Chapter 13 bankruptcy today and eliminate your credit card debts, click here Bankruptcy right now.