|Filing for Chapter 7 can eliminate credit card debt.|
In order to make important purchases such as a car or a house, you need to build up your credit to get your rating high enough to be approved for home or car loans. Increasing credit card debt threatens your credit rating. When your credit card debt becomes unmanageable and you cannot pay what you owe, you may want to consider a Chapter 7 bankruptcy.
Credit card debt can—but not always—be discharged by filing for Chapter 7 bankruptcy.
One of the most common reasons people file for bankruptcy is because of out-of-control credit card debt. Most or all of your nonpriority unsecured debt, including credit card debt, may be eliminated when you file for Chapter 7 bankruptcy.
During hard financial times you may consider filing for bankruptcy to relieve your credit card debt. Oak Creek bankruptcy attorney Steven R. McDonald will guide you through the process to help you get a fresh start.
Remember that Chapter 7 bankruptcy is primarily a debt liquidation program and Chapter 13 bankruptcy is a debt repayment plan. In the case of Chapter 13 bankruptcy, depending on your disposable income and other factors, you may be required to pay back a certain percentage of your unsecured debts, including credit card debt. Usually, Chapter 13 filers only have to pay a very small portion of their nonpriority unsecured debts, including credit card debt.
When creating a payment plan in Chapter 13 bankruptcy, credit card debt usually has a low priority compared to other types of debt. Secured debts such as car loans and mortgages, and unsecured debts such as income taxes and back child support are given a much higher priority in a Chapter 13 repayment plan.
When you're in financial trouble, Steven R. McDonald will walk you through the process of filing for Chapter 7 or Chapter 13 bankruptcy to get you back on your feet. Contact him at his office in Oak Creek, WI for a free bankruptcy case assessment and consultation.