Can an individual eliminate credit card debt by declaring bankruptcy? I didn't think you could wipe it out, just get the bill collectors off your back. But, someone told me that it depends on which chapter of bankruptcy you use. The right one WILL eliminate credit card debt. I know someone who has $80,000 in credit card debt and they are trying to do that to get rid of that debt! Is it really possible? Are there any restrictions in doing this. Can you ever get a credit card again if you do it?
2007-08-10 12:49:17 · 6 answers · asked by ol_skater_boy 2 in Business & Finance ➔ Credit
If you file bankruptcy to eliminate all debt, do you have to give up ALL of your possessions? Will you have anything left?
2007-08-10 13:10:38 · update #1
This is for a friend of mine (really). They don't own a home. They have 2 cars and some furniture and A 401k plan. Between the two of them they make about $40,000 a year. I don't see how debt consolidation will help them How could they EVER pay off $80,000!?! They had a house but they used up all the equity in it over the years and sold it recently and broke even on the deal, ending up with NOTHING! What a mess! I just didn't think they could wipe out their credit card debt! And, it really isn't fair to the rest of us that pay our bills!
2007-08-10 13:45:15 · update #2
There are a number of factors involved.
A chapter 13 is where you have to pay back some of the debt. How much depends on what your current disposable income is and how much your debts total. There is a fairly complicate formula involved. But this will stop them from filing judgments, garnishments or liens. It freezes interest and late fees. And it protect your property if you own a home or car.
A chapter 7 is called "liquidation" for a reason. You may have to give up most of your property. Therefore, if you have a lot of property along with that 80k in credit card debts, you may have trouble keeping it all.
Also, you must pass a "means test". This was put into place to prevent someone who has a very good job from filing BK and dodging their debts. If you earn (generally) over $45k a year you will not qualify for Chapter 7. Again..there is a complicated formula to figure this out.
There are a lot of bankruptcy lawyers who have a free consultation. If you think it's necessary talk your situation over with them.
2007-08-10 13:21:00 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You should visit QUOTESDEAL.NET- I am sure here you can find the best option for you
RE Can you eliminate credit card debt by declaring bankruptcy?
Can an individual eliminate credit card debt by declaring bankruptcy? I didn't think you could wipe it out, just get the bill collectors off your back. But, someone told me that it depends on which chapter of bankruptcy you use. The right one WILL eliminate credit card debt. I know someone who has $80,000 in credit card debt and they are trying to do that to get rid of that debt! Is it really possible? Are there any restrictions in doing this. Can you ever get a credit card again if you do it?
2014-10-01 22:55:06 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Bankruptcy can eliminate all debt including credit card. The court looks at your circumstances and decides whether you are eligible to file Chapter 7 or Chapter 13. In some cases, Chapter 13 pays every penny back.
Bankruptcy stays on your credit report for 10 years. It will affect all sorts of things in your future,including some jobs. You will have to pay high interest on any kind of loan. It is not an easy way to get out of your debt.
2007-08-10 13:02:51 · answer #3 · answered by bdancer222 7 · 0⤊ 0⤋
Yes, credit card debt is dischargeable in chapter 7 bankruptcy. The court will seize all your assets, liquidate them to pay off as much of the debt as possible, and discharge the rest. The only assets that are exempt are the necessities of life, such as clothes, food, a small amount of equity in your home and car, etc. And it will be very difficult to get a credit card for at least 5-10 years after bankruptcy.
2007-08-10 13:23:51 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Donot go for bankruptcy it will stay on your report for another 7-10 years so be careful about it.You can consult with a debt consolidation agency but all are not good . Try to get some who are BBB online registered organisations and are member of US chamber of commerce and then apply online and get their help. They will help you to fix your credit and also relief you from the debt.
To know more you can visit
http://www.debtconsolidationmanagement.blogspot.com
and
http://www.creditcardbiz.blogspot.com
2007-08-10 13:34:50 · answer #5 · answered by Anonymous · 0⤊ 0⤋
hey before you do that, pls be guided by this resource
2007-08-10 12:55:20 · answer #6 · answered by Trish L 1 · 0⤊ 0⤋