Can Bankruptcy Help With Credit Card Debt?
Can bankruptcy help me with credit card debts?
Yes. This is the most common debt we handle in bankruptcy. Almost all credit cards are unsecured debts, meaning the creditor (Chase, Amex, Citibank or whoever issued your cards) cannot claim an interest in the goods you purchased. These debts are discharged and forgiven in full in Chapter 7. In Chapter 13 unsecured creditors like credit cards will be repaid anywhere between 0%-100%. The amount repaid – if any – will depend on calculations surrounding your income, expenses and assets.
It is no surprise that credit cards are the number one debt we discharge. The estimates vary widely on the average size of credit card debt per household. Whether it’s $4,000 or $40,000, it’s the high annual percentage rate (APR) and default interest rates that drive so many of our clients to file bankruptcy. We can’t tell you how many times clients have come to a consultation describing how they struggled to pay their credit card debts. It is common for clients to call their credit card companies and attempt to negotiate a better interest rate and repayment plan. Often, the banks simply say no; it is the inflexibility of banks that drive many clients to file bankruptcy.
Some clients are current their credit cards, but can only afford to pay the minimum payments. The problem is that this often takes 30 years to repay. Bankruptcy can help you break this perpetual cycle of financial servitude to the banks.
To deal with your credit card debts, call JC Law Group PC at 415-963-4004 or email us to discuss your individual circumstances. We are here to help!
Related:
Should Someone with $20,000 in Credit Card Debt File Bankruptcy?