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Credit Card Bankruptcy: To File or Not to File

Credit Card Bankruptcy: To File or Not to File
"""Credit card bankruptcy can be the finest way out of debt. Contrary to other alternatives, this does not require a monthly payment. However, it is not as simple as it may appear. The bankruptcy filing will remain on your credit report for ten years. Your credit score will increase with time. However, the lengthy delay will negatively impact your financial and professional life.

Recent amendments to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 mandate passing a means test in order to qualify for credit card bankruptcy. The means test will ascertain your average income over the past six months, as well as your assets and liabilities. A person with frozen bank accounts, no job, pending litigation, and other unsecured loan debts is also advised by experts to file for bankruptcy.

Compared to Chapter 13

Total elimination of credit card debt is only feasible if Chapter 7 bankruptcy is filed. The above-mentioned measures test is mandatory for this chapter. Your non-exempt assets, such as a market-value collection, jewelry, a second vehicle, or a second home, must also be transferred to a trustee. All of these will be utilized to generate funds to pay off creditors.

Filing for Chapter 7 bankruptcy can also expose you to the risk of criminal bankruptcy fraud charges. The creditor may also file an adversary action or proceeding against you after filing. There, the creditor will assert that your debt should not be forgiven due to your fraud-related debt.

Chapter 13 is the simpler option. It can be approved without excessive scrutiny, but you will be required to repay the debt according to the repayment schedule.

Sincere to Goodness

Filing for credit card bankruptcy can only cause problems if you have acted dishonestly. If you are truly unable to pay the debt, the debt will be discharged without any complications. In this situation, however, it is essential to exercise caution and seek the counsel of a finance attorney. The creditor will do whatever he can to obtain as much money as feasible.

As soon as you decide to declare bankruptcy, stop using your credit card. Legal professionals recommend waiting at least 70 days before initiating a lawsuit. During this time, no expenditures should be made, notably on luxury items.

In fact, luxury items such as costly clothing, furniture, large televisions, and precious jewelry that total over $600 within 90 days cannot be discharged. In addition, cash advances exceeding $875 within 70 days will not be discharged.

Additionally, organize your credit card statements and financial documents. These will come in useful in the event that the creditor accuses you of fraud.

As the saying goes, honesty is the best policy. If you have always been truthful, there will be no problem with registering for Chapter 7 bankruptcy. Even the creditor's adversary proceeding will fail. The credit card bankruptcy process may be lengthy and complicated, but it will be well worth the trouble.""

" - https://www.affordablecebu.com/
 

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"Credit Card Bankruptcy: To File or Not to File" was written by Mary under the Finance / Wealth category. It has been read 176 times and generated 1 comments. The article was created on and updated on 31 May 2023.
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