Is Bankruptcy My Only Option If I Have A Lot of Credit Card Debt?

Does Filing For Bankruptcy Clear Credit Card Debt.Does filing for bankruptcy clear credit card debt?

Credit cards are one of the primary driving forces behind bankruptcy. Whether you’ve made bad choices or you’ve had to choose but to utilize credit cards due to financial challenges, late fees, high interest, and other penalties cause people to experience great distress with credit card debt.

Bankruptcy can be an option to resolve credit card debt, but it isn’t the only thing you can do.

How Far Behind Are You on Payments?

The first thing to consider is how far along you are in the process. If you’ve let a payment deadline or two slip but you have the financial means to get caught up, there isn’t much to worry about. Credit card companies don’t even report past due payments until they’ve gone beyond at least 30 days.

If you tend to miss payment deadlines there’s a chance the credit card company will raise your interest rate. They can also apply late fees and other penalties. These can add up and lead to much worse problems, but you still have a chance to get back on track.

Once things progress beyond an occasional late payment, the credit card company might turn your account over to a debt collector. These are people who focus entirely on collecting payments and they tend to be very aggressive.

Debt Collectors are Aggressive

There are legal limits as to what they can do, but they tend to come as close to the line as possible between legal and illegal debt collection practices. You can expect to get calls at home and work. Your friends and family might receive telephone calls if you do not respond to their initial efforts to contact you. Eventually, they’ll take legal action and file a lawsuit asking the court for a judgment against you that allows them to be even more aggressive.

It’s usually at this point that people decide to check into bankruptcy. If the lawsuit is successful, it could result in wage garnishment or bank levies, making it difficult for you to catch up on your debt.

If you’re hoping to avoid bankruptcy, it’s important to act before a creditor or debt collector files a lawsuit. Options you have for dealing with credit card debt before creditors receive a judgment include:

  • Creating a new payment arrangement or negotiating a different due date for payment
  • Consolidating debts
  • Using a personal loan or other means to pay off credit card debt
  • Asking family members or friends for payment assistance
  • Using money from personal or retirement savings to pay the debts
  • Defaulting on the debt without concern for the consequences because you have no assets or income

Whether or not any of these is a better option than filing for bankruptcy varies from person to person. However, if you prefer none of these options, Chapter 7 bankruptcy is one of the most powerful tools available for dealing with oppressive credit card debt.

You Can Eliminate Credit Card Debt by Filing for Bankruptcy

Credit card debts are unsecured. This means they qualify for discharge when you file for Chapter 7 bankruptcy. Discharge means that once your case is complete, you’ll no longer be legally obligated to pay the debts. The bankruptcy court liquidates your assets if you have any. Then it repays your creditors using those funds. Once they complete that process your case is closed. You no longer owe the credit card company any money.

There are a few exceptions under which you’d still be required to pay credit card debts after filing for Chapter 7 bankruptcy. Creditors can file an objection which is an adversary proceeding. If granted, you’re still obligated to pay the debt.

Another instance in which credit card debt might not be dischargeable is when you used the credit card to pay for luxury goods within a short time before filing for bankruptcy. You can expect the court to look into all of your recent financial transactions. If you spent $675 or more on luxury goods three months or less before filing, the court can rule that debt is non-dischargeable.

Does Filing for Bankruptcy Clear Credit Card Debt

Bankruptcy is one of the most powerful tools available for dealing with credit card debt. It’s important to review your limitations with your bankruptcy attorney before you file to avoid unwanted scrutiny from the court.

If you’d like to know more about bankruptcy or you have a lot of credit card debt and you’re curious if bankruptcy could help you, we can help. Contact the Law Office of Robert M. Geller at 813-254-5696 to schedule a consultation.


Video Testimonials

Tampa Bankruptcy Law Blog

5 Common Budgeting Mistakes Newlyweds Make and How to Avoid Them

Budgeting mistakes are common, especially when you’re young. Not all newlyweds are young adults, but many first-time marriages do involve...
Read More

When Should Married Couples File for Bankruptcy Together?

There's no easy answer to the question of timing when it comes to bankruptcy. In some cases, it may make...
Read More

Can Your Spouses Debt Force You Into Bankruptcy?

If you're married and your spouse has a lot of debt, you may be wondering if that debt can force...
Read More

Do You Need a Bankruptcy Attorney If You’re Divorcing with Financial Problems?

Divorce and bankruptcies are more common than many people realize. Financial problems make a stressful transition even more difficult. If...
Read More

Can You File Bankruptcy without Your Spouse?

Filing for bankruptcy is a decision that should not be taken lightly. It can affect your financial life and the...
Read More

How Seniors Can Avoid Bankruptcy

Seniors are at a high risk of bankruptcy, but there are ways to avoid it. What do you need to...
Read More

What Happens If I Own Too Many Assets to File for Chapter 7?

Does hiding assets in bankruptcy protect them from your creditors? If you own too many assets to qualify for Chapter...
Read More

How to Find the Best Lawyer for Filing for Bankruptcy after Retirement

Many retirees decide to file for bankruptcy as a way to get a fresh start. But finding the right lawyer...
Read More

Does Declaring Bankruptcy Affect My Retirement Savings?

When you're struggling with debt, the thought of bankruptcy might cross your mind. But what would that mean for your...
Read More

Is a Reverse Mortgage Right for Me?

Reverse mortgages in Florida are loans that allow homeowners 62 and older to borrow against the equity in their homes....
Read More


For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More


We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation


Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions