Covid-19 has severely impacted the United States economy. An economic recession caused by the worldwide public health crisis is underway. With this downturn individuals are contemplating now more than ever filing bankruptcy and seeking financial relief. Call us today and set up your free phone consultation to see if filing a Chapter 7 bankruptcy can provide you with relief during these difficult times.

Credit Cards and Chapter 7 Bankruptcy

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Credit Cards and Chapter 7 Bankruptcy

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chapter 7

In a Chapter 7 bankruptcy, you are seeking a fresh start, free of the debts that have previously caused you problems. Although your assets may be liquidated to pay debts, the money that you previously owed may go away.

Discharge of your credit card debt in bankruptcy is not always assured. The bankruptcy trustee may review how you incurred your debt as you were nearing bankruptcy. Some of what you buy close to bankruptcy may not be discharged if you had a shopping spree for luxury goods within 90 days of bankruptcy. However, you may still be able to argue that you fully intended to pay back the charges when you incurred them. Credit card companies may be aggressive about challenging the discharge of debts if they think that your conduct abused the system. However, you are entitled to tell your side of the story before the Bankruptcy Court decides the matter.

On the flip side, if your credit card debt is discharged, you would not need to surrender the property that you purchased. Bankruptcy is often a viable option for people who cannot get out from under a mountain of debt.

There is a cost to filing Chapter 7 bankruptcy. In the immediate short-term, you would need to surrender your credit cards. While your debts have been canceled, it would not be Equitable to allow you to run up additional debts through cards.  However, you would be able to rebuild your credit over time, and you can eventually obtain credit on a limited basis. As you establish a payment history, your amount of credit may increase.

Contact a Melbourne Bankruptcy Attorney

Harnage Law, PLLC can guide you through the bankruptcy process and give you the legal advice and support that you need. To speak with an attorney, you can message us online or call us at 321.549.7886.