Filing Bankruptcy On Credit Cards
After medical bills, credit cards are the most common type of debt included in most bankruptcy petitions. Although it is very rare when a credit card debt is not dischargeable, it is worth mentioning a few potential problems that you should avoid.
The bankruptcy laws are designed to give a fresh financial start to the honest debtor by helping them become debt-free. You can do some things, however well intentioned, that will result in a debt surviving the bankruptcy process, like balance transfers to take advantage of lower interest rates or charges on the eve of bankruptcy.
Considerations When You Owe On Credit Cards
Balance transfers and credit card charges on the eve of a bankruptcy case can become a problem only if the creditor formally objects to the discharge by filing an adversary proceeding. Surprisingly, we see very few objections to discharge by the creditors because of the legal cost, uncertainty of success and the uncertainty of collection.
Furthermore, the law places a heavy burden on the creditor to successfully object to your discharge. Generally, credit card companies must prove that you made false statements or that you are guilty of actual fraud to successfully have their debt survive the bankruptcy discharge. The presumption is that you are not guilty of these acts unless the charges are more than $500 for consumer debts made within 90 days before filing bankruptcy, or for cash advances for more than $750 made within 70 days before filing bankruptcy. Even then you may be able to rebut the presumption and obtain a discharge of the debt in question.
We recommend that you seek our advice before transferring balances or continuing to make credit card charges if you possibly think that you may have to file bankruptcy. We will also advise you of the optimal time to file a bankruptcy case to avoid discharge problems.
Don’t take on your creditors alone!
Call or email the Counce Law Firm at 901-201-6012.
Free confidential consultation with a lawyer, not a paralegal.
We take the time to understand your needs and answer all of your questions. While we want to solve your problem quickly, it’s important that you are comfortable with the process, and understand how it will impact you. These thoughtful conversations enable us to ensure the best possible outcomes.
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Keeping Your Credit Cards After Bankruptcy
You are not required to list credit cards that have a zero balance, and sometimes it is possible to keep these cards. We live in an electronically connected world; a credit card issuer may learn about a bankruptcy and cancel your card with a zero balance, but many do not. The best way to keep a card after bankruptcy is to have a card with a zero balance that is not owned by the same banks as the other credit cards listed in your bankruptcy. Caution: Sometimes there are pitfalls to paying off a credit card before filing, so talk to us first and we will guide you through this maze.
Contact Us Today
Call now to learn about what options are available to you in your particular financial situation and how to stop harassment and debt collection today. Contact our law firm today online or call 901-201-6012 to schedule a FREE CONFIDENTIAL CONSULTATION.
Unlike many firms, you will always discuss your financial situation with an attorney, not a paralegal or assistant.
We are a Title 11 debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. This ad does not create an attorney-client relationship until a written agreement is signed.