Credit Card Debt and Chapter 7 Bankruptcy are often heard together. Credit card debt is one of the primary motivating factors for people who file for bankruptcy, especially Chapter 7 Bankruptcy. Filing Chapter 7 Bankruptcy to get rid of credit card debt can be a great way to start over financially. If you are eligible, Chapter 7 Bankruptcy is a fast and efficient debt relief option for credit card debt. If you are considering Chapter 7 Bankruptcy, contact the Houston Bankruptcy Lawyers at The Law Offices of R.J.Atkinson for a free credit card and bankruptcy evaluation. We can help you decide if Chapter 7 Bankruptcy is an option for you to get rid your credit card debt.
Chapter 7 Bankruptcy can get rid of Credit Card Debt…
When a person files Chapter 7 bankruptcy to eliminate credit card debt, it’s not because credit cards are necessarily bad, it’s usually due to their credit card debt getting out of control. Credit cards can sometimes seem like free money or easy money. The ease of credit cards use to borrow from one to pay another can make conditions worse for people in financial trouble. Credit card companies make it far too easy to transfer credit card balances which can influence those seriously in debt to make bad decisions. Credit cards can easily allow you to get into debt beyond your control when life’s problems come your way. Divorce, loss of employment, medical problems or illness, can impact you financially to the point where you turn to your credit cards to live on.
Bankruptcy under Chapter 7 of the Bankruptcy Code is usually referred to as "liquidation bankruptcy" or a "straight bankruptcy." A Bankruptcy Court may relieve a debtor from the responsibility to repay most all of their debts under Chapter 7, but still allow them to keep most of their property. A Chapter 7 bankruptcy is available to individuals and businesses however there tends to be more individual Chapter 7 filings than those of businesses. When an individual files for Bankruptcy it is often referred to as Consumer Bankruptcy or Personal Bankruptcy.
Before you can file for Chapter 7 bankruptcy to get rid of credit card debt, you must take the Bankruptcy means test. This means test will determine whether you can file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. If you pass the means test, you will be able to get rid of your credit card debt, as well as all other dischargeable debts.
Despite the term liquidation, in a Chapter 7 Bankruptcy, property is rarely liquidated, since most property is protected by exemption under Texas State law. When an asset is exempt, a bankruptcy trustee cannot take the property. A debtor in Texas can choose either the Texas Bankruptcy Exemptions or the Federal Bankruptcy Exemptions. Most people who file Chapter 7 bankruptcy will keep all of their property as allowed by law.
The purpose for filing a Chapter 7 Bankruptcy is usually to discharge a debt, or to cancel some debtor obligations. It is often used to get rid of credit card debt, and other unsecured debt. A Chapter 7 petitioner does not have to make payments out of future income to have their debts discharged. A Chapter 7 Bankruptcy asks the Bankruptcy Court to erase your dischargeable debts forever.
Chapter 7 Bankruptcy will eliminate credit card debts unless there is a question of fraud or other matter of that prevents discharge. If a credit card company believes there is fraud, they may decide to challenge the discharge of the debt in a Chapter 7 Bankruptcy. They can file an adversary proceeding to object to your discharge. An adversary proceeding is similar to lawsuit, but in the Bankruptcy Court. If a credit card company files an adversary proceeding to object to the discharge of you credit card debt with them, it can become quite frustrating, and costly. If they prevail, the debt will follow you until it’s paid and can’t be eliminated in a subsequent bankruptcy filing. If you have any questionable circumstances surrounding your credit card debts or transactions that could be construed and fraudulent, you should discuss these with your attorney before filing your Chapter 7 case. Different credit card companies have different policies and procedures as to what they believe is fraud or potentially fraudulent. Some things credit card companies look for are as signs of fraud are as follows:
- Cash advances right before the filing bankruptcy
- Charging up one card in order to make payments on other cards
- Increased use of the credit card shortly before filing bankruptcy
- A large balance or over the limit at the time you file
- Charging on a newly issued card
- Using the card after you file bankruptcy
- Making high dollar purchases right before filing
- Living on the credit card when you are unemployed and don’t have any means of repayment
The majority of Chapter 7 Bankruptcy filers that have credit card debts don’t end up facing adversary proceedings to deny their discharge, but it is something to be aware of if you have significant credit card debt or any of the above signs apply to you. And, in the absence of fraud most Chapter 7 Bankruptcy debtors are able to completely eliminate their credit card debts in a Chapter 7 Bankruptcy. If the bankruptcy means test provides you are eligible to file Chapter 7, and there is no fraud, then Chapter 7 Bankruptcy will get rid of your credit card debt.
Chapter 7 Bankruptcy was designed for individuals with financial difficulties that don’t have the ability to repay their existing debts. Most often, credit card debt, medical bills, payday loans, and other unsecured debt is completely eliminated in a Chapter 7 Bankruptcy. The purpose of filing a Chapter 7 case is to obtain a discharge of your existing, primarily unsecured, debts.
Each case is different and is particular to the individual facts and circumstances of that specific situation. It is important to seek experienced Houston Bankruptcy Lawyer to learn your legal options under the Bankruptcy Code. Chapter 7 may allow you to get a fresh financial start and completely get rid of your credit card debt.
If you are Knee Deep in Debt with credit cards, and are tired of creditor harassment, contact us today. We can help you decide if Chapter 7 Bankruptcy is for you. If you live in Austin , Houston, Dallas, or San Antonio, and are interested in filing for Chapter 7 Bankruptcy to eliminate credit card debt, contact the Houston Bankruptcy Attorneys at The Law Offices Of R.J.Atkinson for a free bankruptcy evaluation and a free bankruptcy means test to see if you are eligible to file for Chapter 7 Bankruptcy. We would like to help you to obtain a fresh start. The only thing you may have to lose is your credit card debt.
Questions about Eliminating Credit Card Debt in Chapter 7 Bankruptcy?
Contact Houston Bankruptcy Attorney R.J.Atkinson: 713-862-1700
