Can I Eliminate my Credit Card Debt if I'm Current?

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Let's answer the question first by saying you definitely can declare bankruptcy chapter 7 or chapter 13 while your current on your medical or credit card debt. I recently published a few articles that cover this topic, offering consumers seeking debt relief options some valuable information. One recent article, "Filing Bankruptcy: Use the Laws as a Sword not a Shield" will explain how financially strapped consumers can avoid burning up all their savings or retirement and protect their credit scores by being proactive rather than reactive. Additionally, Filing Bankruptcy-Before I Go Bankrupt" will offer you information on how to "Eliminate Your Debt, Not Your Life Savings"!

How Bankruptcy Helps

As bankruptcy attorneys we typically see clients come to us who are just flat out broke and facing a court summons, foreclosure, auto repossessions, property lien or bank levy. This does not have to be you! You can stop the bleeding of minimum credit card payments and file bankruptcy while you're current on ALL your debts. You may be able to completely ELIMINATE and WIPE OUT all your credit card debt as well as any other unsecured debts you're burdened with.

Filing Early May Prevent Some Credit Issues

By filing bankruptcy while you're current on your credit card debt you will also avoid any negative reporting against you; when your debts are discharged you look pretty good on paper. Please allow me to explain. When creditors look at your credit report they see more than credit scores, they see it all. Yes, they see the good, the bad, and the ugly. Every picture tells a story, and so does every credit report. The truth is that if you file bankruptcy while you're current and eliminate your unsecured debt without being delinquent it make you appear much more responsible than someone who files bankruptcy after receiving charge offs, judgments, wage garnishments revolving late payments.

Every negative report on your credit hurts your credit scores and hurts your opportunity to rebound from your financial hardship. If you file bankruptcy while you are current the only negative reporting is the bankruptcy filing and your credit score will bounce back to the 700's rather quickly. When you are current on your credit cards but have no available credit, your credit scores suffer due to your debt ratio's. When there's no available credit the credit beau's penalize you and your credit scores suffer. You continue to make minimum payments and go nowhere fast, fighting a losing battle and filing bankruptcy when you're bankrupt. This is not the way to go, you don't have to go down in flames trying to meet your obligations when you don't have the means to do so.

Real Benefits of Bankruptcy Law

By filing bankruptcy early in your financial struggle, you avoid foreclosure, creditor harassment, negative credit reporting, and I can go on and on. Yes, no one wants to file bankruptcy unless they have to, but sometimes you do things because it's the smart thing to do. Consider the way creditors will view you after your bankruptcy is discharged and a year or two has passed. You have no negative credit reporting, you filed bankruptcy due to under or unemployment, and sought debt relief under Federal law. You did nothing wrong, you did everything right, you just couldn't keep up with your financial obligations and needed a fresh start.

If I'm a creditor looking at your credit report in 6 months I'm seeing someone who did the responsible thing, rather than someone who has not been credit worthy. In matter of fact, your credit score could be as high as 740 in a year being your debt has been discharged without all the negative reporting on your credit report. You can get a new car loan in 6 months and a new home loan in 2 years out of bankruptcy. Your creditors find you to be a good risk being you can't file bankruptcy again for 7 years and you have no debt.

An Example Bankruptcy Case

We recently had an elderly woman (72 years old) come to us wanting to file bankruptcy but concerned about keeping one credit card she used to purchase here medicine every month. She had over $1,200 a month of credit card obligations and she was current. Her prescription costs were $300.00 per month and she was putting that on her credit cards every month then making the minimum monthly payments, seeing her credit card balances going up due to high interest rates. Well, you don't have to be a bankruptcy attorney or a math teacher to see by eliminating the $1,200 a month credit card obligation along with her medical bills she can free up a lot of money and pay cash for her monthly prescriptions. In other words, she can save close to $1,000 a month after filing bankruptcy rather than be broke every month and running up her credit card debt. Yes, it makes a lot of sense when you look at it that way and she will rebound from the bankruptcy filing rather quickly.

This was a hard choice but a life changing experience, now she could afford all the things she couldn't before. If you are overwhelmed with debt and fear the thought of losing everything when you file bankruptcy please remember this lady. She kept her home, car, furniture, jewelry, and her life savings while eliminating all her unsecured debt. If you are seeking debt relief and have questions about filing bankruptcy please call the bankruptcy attorneys at the Law Offices of Zhou & Chini. We will offer you a free consultation and be happy to explain all your options. We may be able to even help you avoid bankruptcy with debt negotiation or other forms of debt relief. With over 10 locations throughout California we are available to our clients 7 days a week. Contact Zhou & Chini toll free at (800) 972-9600 or visit us on line at