Bankruptcy and Credit Cards
Bankruptcy and credit cards go hand in hand. The majority of people have credit cards, so it is safe to say that the majority of people who file for Chapter 7 have credit card debt to include on their list of creditors. This type of card credit is unsecured debt. That just means they have nothing to repossess if you do not pay.
As soon as a person files for bankruptcy the credit card companies have to stop calling you at home and work. They have to stop sending threatening letters to you. They have to stop adding late charges and penalties to your account. All of these matters will be settled when you have your bankruptcy hearing. By filing you receive an immediate stay on all your outstanding debts.
The stay does not just apply to credit cards or to unsecured debt, any creditor is stopped from taking any action including repossession until the bankruptcy hearing is final. You will be able to rest easy again without continuous harassing phone calls.
There are some credit card debts that will not be covered when you file for Chapter 7. If you take a cash advance, out on your credit card for a sum of $750.00 or greater seventy days or less before you file, the amount will not be covered in the bankruptcy. If you take a large cash advance and then file bankruptcy within a month it appears like you planned to defraud the credit card company out of that money. If you have taken a large cash advance, just delay filing until after seventy days have passed.
When you file Chapter 7 everything you owe on your credit cards will be erased. This includes all charges that were made on the card as well as all interest charges, late payment fees and any other charge that has accumulated on your account. After filing Chapter 7 you will have no credit card debt.
The best part of having a credit card with bankruptcy filing is your slate is wiped clean. Chapter 7 can reflect on your credit report for 10 years, but if you got in over your head with credit card debt before bankruptcy filing then you are going to get a fresh start. You will know this time how to handle the credit cards and what pit-falls you need to avoid to keep yourself from acquiring too much card debt.
If you are sitting there wondering how on earth you would make it with no credit cards you need to hear this. The filing of Chapter 7 and going bankrupt with credit cards does not mean you will not have any cards for the next ten years. The ones you currently have will be discharged, and after a period of time you can apply for other cards. You may have to start with a small limit secured card but you can have cards again before the 10 years is up.
Filing Chapter 7 and having debts owed to credit cards and other creditors discharged is not the end of your credit. It is actually a new beginning to your credit. Yes you will have to work a little harder at getting your credit score back to where it was before you became financially troubled, but it is possible to get there, you made it there once already so you can do it again.
Just wait until whatever caused the need for filing bankruptcy to be corrected before you start trying to get back on the credit horse and ride. If you jump back on to quickly you will more than likely not be as successful. The next time though you will know everything you need to get your credit score up and maintain it forever.
Filing bankruptcy online is a new and convenient option for people who are considering this action. You will be able to fill out all forms, find an attorney to file them for you and to represent you at your hearings and such. You will have the ability to ask questions of your attorney about any aspect of Chapter 7 that has you confused.
You will not have to lose all your belongings. Many of your possessions are exempt from being sold or relinquished during a bankruptcy. Go online and check the facts out, and start rebuilding your life today.
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