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I've got over $20,000 of credit card debt that I cannot repay. I was doing ok until my hours got cut at work and I lost a significant amount of my income. Now, I can't even make the minimum credit card payments every month. I'm getting charged late fees and the interest is adding up fast.
I don't see any real options to earn more income any time soon, so I'm running out of options. How are credit cards handled in a bankruptcy? Will filing bankruptcy get rid of my credit card debt?
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In almost all bankruptcy cases, unsecured debt, such as credit card debt, will be eliminated. If you make enough money to file for a chapter 13 repayment plan, you and your bankruptcy lawyer will work out a plan to get you up to speed on other "secured" payments, such as a car loan and/or mortgage, but credit card debt will probably be discharged through the bankruptcy so you won't have to repay it.
If you don't make enough money for a chapter 13 bankruptcy, then chapter 7 is a better option. In this type of bankruptcy, a trustee will be assigned who will look at your income, debts and assets to determine if you have any personal property of value that is not exempt that can be sold to repay creditors. However, in reality, most personal property will be "abandoned" by the bankruptcy trustee, and you will keep most if not all of it.
Talk to a bankruptcy lawyer to find out how bankruptcy will work for you, and if it the best option to get rid of unmanageable credit card debt.
Good Luck.
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Posted by Staff Writer on 22 Feb 2010
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