Often times, consumers find themselves facing a seemingly insurmountable amount of credit card debt. This can be caused by many different reasons, including paying for medical bills, helping with family emergencies, or just plain reckless spending. Furthermore, credit card companies spend millions in advertising to encourage credit card spending. Facing a mountain of credit card debt can have disastrous consequences on your life, such as increasing stress and facing a lawsuit. What is worse is that lawsuits can lead to wage garnishments and property liens.
Eliminate Credit Card Debt with Bankruptcy
The good news is that with a few minor exceptions (outlined below), credit card debt can always be eliminated, or “discharged” in bankruptcy. The reason is because credit card debt is generally unsecured debt. Unsecured debt is debt that is not secured or collateralized by a piece of property that you own. Therefore, it does not matter if your total bill includes interest or late fees, or what the total amount you owe is. You can have all your credit card debt discharged whether you owe $10,000 or $100,000. It also does not matter if the credit card company has already filed a lawsuit against you. Filing a bankruptcy will immediately put a stop, or “stay,” on the credit card company’s lawsuit against you. Once you receive your discharge, your lawsuit will just go away.
When Credit Card Debt Not Dischargable in Bankruptcy
However, there are limited circumstances where your credit card debt may not be discharged. For instance, if you charged a large sum of money on your credit card 90 days before filing bankruptcy, the credit card company can file a lawsuit, or “adversary proceeding,” against you alleging fraud. The best way to guard against such allegations is to stop using your credit cards if you intent to file bankruptcy. This will allow for a smoother filing of your bankruptcy to discharge your entire credit card debt in full. Contact a Orange County bankruptcy attorneys for more information.