Tuesday, December 22nd, 2009
Can you eliminate credit card debt by declaring bankruptcy?
Juliette B asked:
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?
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?
December 23rd, 2009 at 3:23 pm
Yes, you can. You can get it “wiped out”, but based on your income, you may need to file Chapter 13 instead of 7. With a 13, you pay back a small portion of the debt over a 4-6 year period. After your bankruptcy has been discharged, you can get more credit cards, but they will be a significantly higher rate of interest. With any kind of personal bankruptcy, you can keep your home and vehicle and have other debts removed. It does stay on your credit report for a minimum of 7 years, which means anything involving credit will be given at a higher rate of interest.