Let’s clear up some important truths about bankruptcy and credit card debt—secrets these companies may prefer you don’t know. Knowing this information can help you make better financial and future decisions.
Credit card companies make most of their money from interest and fees. When you carry a balance month to month, they earn more. High interest rates, late fees, and over-limit charges add up quickly.
Because of this, credit card companies often push minimum payments and encourage you to keep borrowing. They benefit when you struggle to pay off the full balance.
One of the biggest secrets is that bankruptcy stops collection calls and lawsuits.
When you file for bankruptcy, an automatic stay goes into effect. This legal order requires creditors to stop contacting you or trying to collect debts immediately. That includes calls, letters, wage garnishments, and lawsuits.
Many credit card companies don’t want you to know about this protection because it interrupts their collection efforts.
You might hear that bankruptcy wipes out all your credit card debt. That’s mostly true, but there are exceptions.
Most unsecured debts, like credit cards, can be discharged in Chapter 7 or paid off through a repayment plan in Chapter 13 bankruptcy.
However, debts from fraud usually cannot be discharged. Also, if you made large purchases before filing for bankruptcy, the court may question whether those debts can be eliminated.
A bankruptcy attorney can help you understand which debts are dischargeable.
Another common myth is that bankruptcy ruins your credit forever. While bankruptcy does affect your credit report, it doesn’t mean the end of your financial life.
A Chapter 7 bankruptcy stays on your credit report for up to 10 years, while a Chapter 13 stays for up to 7 years. This sounds like a long time, but many people rebuild their credit sooner.
After bankruptcy, you can start fresh with responsible credit use and financial planning.
Sometimes, when credit card companies see you struggling, they might suggest debt settlement companies. These third parties promise to reduce your debt for a fee.
But many debt settlement companies charge high fees and don’t consistently deliver on promises. They might also advise you to stop paying your credit cards, which can hurt your credit score and worsen things.
Always be cautious and research any debt relief option before committing.
Florida has laws designed to protect consumers from unfair debt collection. For example, creditors cannot harass you with abusive phone calls or misleading information.
Bankruptcy also protects exempt property—assets you get to keep during the process, such as your home (within certain limits), retirement accounts, and personal belongings (within certain limits).
Credit card companies don’t want you to focus on these protections because they empower you to take control.
Filing for bankruptcy can:
You don’t have to be trapped by credit card debt or companies’ tactics.
If credit card debt feels like a heavy burden, the first step is to get informed.
An experienced attorney can explain your options and help you decide the best path forward.
Big credit card companies want to keep you in the dark. But you deserve clear information and honest advice.
If credit card debt is weighing you down, know there are legal protections and solutions. Bankruptcy might be a valuable tool to regain control over your finances.
We’re here to help you navigate this process with care and respect. If you want to learn more or have questions, please contact the Law Offices of Robert M. Geller. We’ll listen, explain your rights, and help you make confident decisions.
One of the most common questions people ask during a legal consultation with a bankruptcy…
When you’re preparing to file for bankruptcy, the idea of working with a bankruptcy trustee…
If you’re preparing to file for bankruptcy, you’ve probably heard about something called the “bankruptcy…
If you’re thinking about filing for bankruptcy, the term “means test” may feel intimidating. Most…
If you’re feeling overwhelmed by debt right now, you’re not alone. The latest bankruptcy trends…
If you’ve been researching bankruptcy online, you’ve probably noticed something frustrating right away: every source…