What Will Bankruptcy Do To My Credit Card Debt?
Make no Mistake About it, Even in this Economy, Credit Card Companies are Still MAKING PROFITS!
Is it a Wonder?
A Few Pointers On Credit Card Debt. Nearly all credit card debt is unsecured debt, meaning that it is a debt that a creditor has not secured by collateral. The creditor is called an unsecured creditor, as opposed to a secured creditor which holds a lien on property (collateral) to secure payment of a debt. Secured creditors have a lien or right to foreclose on collateral for payment of a secured debt.
The credit cards industry has become a financial crisis all of its own. Even though interest sometimes of over 30% accrues, millions of people everyday are living on credit cards to make ends meet, all with the expectation, and intention, to payback those small daily “loans”. The problem: that “someday” never seems to arrive, and those “loans” are due. Unfortunately, we are in a “credit card society” where billions of dollars every year are being earned from the credit companies “banks” supporting this crisis. It is not a crisis to them! In fact, according to the Federal Reserve, the size of the total consumer debt in the U.S grew nearly five times in size from 1980 ($355 billion) to 2001 ($1.7 trillion). Consumer debt in 2016 stood at $747,000,000,000.00. (That’s a lot of “0”‘s!)
The average household in 2016 carried nearly $16,061 in credit card debt.
So what happens to your credit card debt when you file for bankruptcy protection? In a Chapter 7 Bankruptcy, one of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a “fresh start.” The debtor has no liability for discharged debts. Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged, such as certain student loans and taxes. Moreover, a bankruptcy discharge does not extinguish a lien on property. Subject to certain exceptions, your credit card debt will be discharged through a Chapter 7 bankruptcy however. Talk to a bankruptcy attorney today for more information.
Call Markwell Law, LLC today for a free consultation about your debt options.
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