In an economy where the coronavirus is dominating headlines, people are out of work, and unable to pay their high interest credit cards, debt still remains one of the largest issues that consumers struggling financially face.
Credit card debt, divorce and medical bills are some of the biggest reasons consumers are forced to file bankruptcy. If you are struggling to make your minimum credit card payments, you are not alone. Most people in New York are strugging with large credit card bills every day.
When A credit card account has been delinquent, or unpaid, for more than 180 days, banks will charge off this debt. You may see something on your credit report that says “charge off” with a $0 balance. Many assume this means that the credit card companies are letting that debt go. This is abosultely wrong. When a “charge off” is reported by the credit cureaus it means that the debt has been sold off to a debt collection who will call, harass and even sue you.
Debt collection is the reason that many consumers are forced to file bankruptcy. Chapter 7 bankruptcy is the fastest way to get out from credit card debt and start over. Below we will go over some basics to help you determine if filing bankruptcy on your credit cards is the right solution for you.
Credit Card Debt is Dischargeable in Bankruptcy
This is the rule when people want to get rid of their unsecured debts, like credit cards and medical bills. Unsecured debt is dischargeable in bankruptcy. When you file for bankruptcy in New York or New Jersey, all of your unsecured debts are eliminated. This means you no longer have to pay these bills. If you file bankruptcy and creditors still try to go after you for the unpaid debt, they can be in violation of the law. Some companies may get you to try and sign up to their debt settlement companies. Keep in mind, that this will also negatively impact your credit and you will owe tax consequences on the forgiven debt.
When You file Bankruptcy your Credit Report Should show Zero balances After Bankruptcy
After bankruptcy is over, the credit card companies are required to report discharged debt as a zero balance. this is different than a charge off that you had before.
Can You Keep a Credit Card Out of Your Bankruptcy?
All debts including credit cards must be disclosed in your bankruptcy petition. This means that you cannot keep any credit card out of your bankruptcy. It must be dsclosed on your bankruptcy petition along with your other debts. Keep in mind, that if you don’t list the debt, more than likely the credit card company will close the account out anyway. Credit card companies do routine checks and are notified of your bankruptcy filing even if you do not include it.
Will I Be Able to Get a Credit Card After Bankruptcy?
Yes! Many people often assume lenders will never give them credit cards after they filed for bankruptcy. This is not true! Lenders are more inclined to give you credit because they see you have no outstanding debt and you can’t file bankruptcy again for another eight years. Additionally, bankruptcy will eliminate all of your unsecured debt making your debt to income ratio more attractive to lenders. Many of our clients receive notices in the mail as soon as their bankruptcy case has closed asking to apply for a credit card.
Speak With a Bankrutpcy Lawyer
As long as your acting in good faith when you file bankruptcy, your debt should get eliminated. If you are facing high-interest credit cards and you don’t know where to turn contact one of of our New York or New Jersey Bankruptcy lawyers today. By calling we will give you a free consultation at (973)-979-9078 or emailing at Karra@klkbankruptcylawyer.com