Credit Card Debt Bankruptcy
Why credit card debt bankruptcy is easy
Chapter 7 is fast, Chapter 13 is easy, and Chapter 11 offers expansive options. The best of all worlds however is not available for all people in all cases. Credit card debt bankruptcy is one of the easiest to file and prove in court. This ease is due primarily because these debts are considered general unsecured claims and are assigned the lowest priority for repayment. In Chapter 7 cases, general unsecured claims are commonly eliminated completely in four months, from the date of initial filing, to final discharge. In Chapter 13 cases, repayment plans frequently provide no more than 10% payment during the plan, and eventual discharge of all remaining balances at the end of the plan. Both Chapter 7 and Chapter 13 are available for nominal attorney fees.
Problems discharging credit card debt
If you notice, virtually all credit card applications include a question about income earned. Oddly, card applications rarely require proof of income, but instead, rely upon only the truthfulness of the applicant. In practice, this question snares many applicants when filing Chapter 7, because an over-statement of income can be considered as fraud intended to induce the extension of credit. In this event, credit card companies are generally agreeable to waiving fraud charges in exchange for a reaffirmation agreement and continued payment of all assessed principal, interest and late fees.