Getting Bankruptcy Protection for Mounting Credit Card Bills

Are you drowning under the weight of credit card bills? Are you watching your balances compound with interest, and are you no longer able to make even minimum payments? It may be time to consider getting debt counseling, or even bankruptcy.

Bankruptcy and Credit Card Debt

For many, declaring bankruptcy is the only option when facing insurmountable credit card debt. If you are receiving haunting calls from collection agencies, and your credit already seems beyond help, bankruptcy may be the best option for you. Essentially, credit card debt is unsecured debt. That means that you have nothing, like a house or a car, to back up, or secure, the debt on those cards. In that case, your unsecured debt can be discharged, or relieved, when you declare bankruptcy.

When considering bankruptcy to escape from credit card debt, remember a few important things:

Bankruptcy WILL protect you, but not without a price. Bankruptcy will remain on your credit report for 10 years, and will affect your ability to get future loans.
Bankruptcy may remove the immediate sting of insurmountable credit card debt, but it will not fix what got you in such debt in the first place. It is critically important that you get a handle on your finances by meeting with a professional to learn how to create a budget and stick with it!
There are other alternatives to bankruptcy, so do your homework!

If after these considerations you find that bankruptcy is still your only alternative, familiarize yourself with the types of personal bankruptcy. There are essentially two types.

Chapter 7 bankruptcy, also known as straight bankruptcy or liquidation, involves utilizing your liquid assets (assets that are easily turned into cash) to pay off some of your debts, and then discharging, or relieving you, of the rest of the debt. With Chapter 7 bankruptcy, certain assets are exempt from the bankruptcy, and you have to meet certain criteria to even be eligible. This form of bankruptcy is, however, the relatively quickest way to a clean slate, free from credit card debt.
Chapter 13 bankruptcy, also known as a wage earner’s plan, involves you developing a repayment plan for your debt. The court must approve of your plan, and you are legally bound to make payments over a particular period of time. These payments will pay off all or some of your credit card and other debt, while allowing you to maintain some of your assets.

Getting Help

When you are drowning under your credit card bills, you may wish to turn to a bankruptcy attorney to throw you a figurative life preserver. Your attorney can assist you in understanding what type of bankruptcy you may be eligible for as well as in helping you to choose which bankruptcy to file. He can also help you in the actual process of dealing with the bankruptcy court.

Think Bankruptcy Might Be for You?