Credit card debt is often what sends many people running to a bankruptcy lawyer. But even those who don’t file for bankruptcy still struggle to get a handle on credit card debt. The average American now owes $5,700 to credit cards, while Arizonans owe an average of $7,100. Maybe it’s the rising cost of living in the state that’s causing so many to rely on their credit cards.
If credit card debt is overwhelming your budget and pushing your finances to their breaking point, filing for bankruptcy may be the best course of action. Before you decide, you should meet with an experienced Gilbert bankruptcy attorney who can thoroughly review your finances and help you understand your rights and options.
Chapter 7 or Chapter 13?
Individuals have two options for filing for bankruptcy: Chapter 7 or Chapter 13 bankruptcy. Both will offer debt relief, but they work in very different ways.
Most people who talk about bankruptcy are thinking of Gilbert Chapter 7 bankruptcy. This is the type of bankruptcy that gives you the “clean slate” by discharging most of your debts. Unsecured debts like credit cards and medical bills can be discharged, so long as you meet the qualifying criteria.
In Gilbert Chapter 13 bankruptcy, your attorney works with you and the bankruptcy trustee to develop an affordable repayment plant to your creditors. You pay one payment for all your debts each month, and you get a lower interest rate. You pay under the plan for three to five years, and some of your debts may be discharged at the end of that time. If you are paying back credit cards under a Chapter 13 debt restructuring plan, you will end up paying much less and pay the cards off faster.
Not all your debt can be discharged through bankruptcy. If you qualify for Chapter 7 and are primarily focused on discharging credit card debt, the good news is that there is no limit on the amount that can be discharged. You can have tens of thousands of dollars in credit card debt that is wiped away within a few months of filing.
However, you need to watch your spending patterns before you file for bankruptcy. Some people decide they are going to file for bankruptcy and then they run up their credit cards in anticipation of not having to repay that debt. If the court sees that you have spent a lot of money on your credit cards in the months prior to the bankruptcy, that debt may be excluded from discharge, or you may be charged with fraud. For example, maybe you were buying clothes, but you bought a lot of designer clothes or you bought enough clothes to last you a year, that would look suspicious to the court.
Once you start thinking about filing for bankruptcy, you should put a halt to your spending and talk to an experienced bankruptcy attorney right away.
Filing for Bankruptcy
You really need to meet with an experienced Gilbert bankruptcy attorney to determine if filing for bankruptcy is going to be the best course of action to deal with your mounting credit card debt. You need a bankruptcy expert to look over your finances and to explain how the different chapters would best benefit you. An attorney will also help you determine if you meet the Means Test to qualify for Chapter 7 bankruptcy to discharge all that credit card debt. You may need to consider Chapter 13 bankruptcy if you make too much money or have too many assets that you don’t want to lose to creditors.
If you are struggling with credit card debt and don’t see an end, call Gilbert Bankruptcy Lawyers today. We are a trusted, low-cost bankruptcy firm that is committed to helping you get the debt relief you need. We can help put a stop to harassing phone calls and debt collection measures, such as wage garnishment. We can help you get fast debt relief through Chapter 7 bankruptcy, or we can help you get your debts on a more affordable payment plan under Chapter 13 bankruptcy. Call us today to schedule a consultation with an experienced bankruptcy lawyer in Gilbert.
Gilbert Bankruptcy Lawyers