If you qualify for a Chapter 7 bankruptcy, you may be able to totally wipe out unsecured debt, such as credit cards, personal loans, and medical bills. No one wants to file bankruptcy, but sometimes filing bankruptcy is the best way to calm the troubled waters and establish financial stability. Even if you do not qualify for Chapter 7 bankruptcy, a Chapter 13 bankruptcy (debt reorganization) may help you pay off credit card debt by forcing your creditors to permit repayment of only a portion (sometimes none) of your debt with no interest, late charges or penalties over five years.
Credit card debt relief may be available through Chapter 7 bankruptcy. You do have to qualify to file Chapter 7 bankruptcy. If you do not qualify for Chapter 7 bankruptcy or have other issues stopping you from filing Chapter 7 bankruptcy, a Chapter 13 bankruptcy can help. In a Chapter 13 bankruptcy, (depending on your income and assets), you may be required to repay some or all of the debt.
Pre-bankruptcy planning is very important. Do not make charges on credit cards before filing bankruptcy. Recent credit card charges can result in you having to repay the charges and in the some situations can keep you from being able to obtain a discharge.
Think twice about refinancing your home to pay off credit card debt. This would be putting the roof over your head at risk. If you can’t pay your credit cards, you may be harassed and sued, but you will usually still have a place to live. In Texas, even if you get a judgment against your home, as long as your home is exempt under the homestead laws, a creditor cannot take your home to pay the judgment (while you are living). There are other adverse consequences, of course, to having a judgment against your home. But you are not in danger of actually losing your home.
If you are sued or have a judgment against you, or think you may be sued, consult a bankruptcy attorney who can help you consider your options.
Your Next Step to Debt Relief
If you are struggling with debt, consult with an attorney who can give you guidance on options available to you. Each case is different and consultation with an attorney knowledgeable about the law as it applies to your particular circumstances is an important first step in resolving debt.
Read More About Debt Lawsuit Defense
Read More About Bankruptcy and Debt Relief
Chapter 7 – Usually the cheapest and fastest type of bankruptcy, Chapter 7 can wipe out credit cards, medical bills, and loans.
Chapter 13 – Does everything that Chapter 7 does, but with the added benefit of being able to help catch up on past due mortgages, car payments, and taxes.
Taxes – If you owe money to the IRS, there may be several different options for you, including some non-bankruptcy options.
Student Loans – There are many solutions to student loan issues, including getting a better payment plan, curing a default, and even loan forgiveness.
Debt Lawsuit Defense – When a creditor sues you over a debt, you can respond with a defense, which may allow you to win the lawsuit.
Loan Modifications – A special agreement between you and your mortgage lender might help you with a past due mortgage loan.
Debt Library – More in-depth articles on some of the more detailed areas of bankruptcy and debt relief.
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