Using Chapter 7 Bankruptcy To Eliminate Credit Card Debt
Millions of Americans struggle to stay on top of mounting credit card debt. Whether the debt was acquired out of necessity to buy food, gas and other essentials or simply overindulgence that caught up with you, it is a problem that can ruin your credit. If you are making late payments or unable to make payments at all, your credit card debt is going to ruin your credit rating. Depending on your income and level of debt, filing for Chapter 7 bankruptcy might be your best option for getting out from under crushing credit card debt and protecting you from repossession, foreclosure and harassing phone calls from debt collectors.
Why Chapter 7 Makes Sense
If you default on your credit cards by missing monthly payments or simply continue making minimum payments, you are digging a hole you may never get out of. Minimum payments do not reduce your debt in any meaningful way and being in default really brings down your credit score, not to mention triggering a seemingly never-ending barrage of harassing phone calls. Filing for Chapter 7 bankruptcy can help give you credit card debt relief while simultaneously protecting you from repossession, foreclosure and other debt collection actions.
How Chapter 7 Allows You To Rebuild Your Credit
While filing for bankruptcy might seem like an announcement to the world that you are a bad credit risk, it is actually a fresh start toward building a good credit rating. Credit card debt falls under the category of dischargeable debt, meaning that if you pass the means test and qualify for Chapter 7 bankruptcy, you can have all of your credit card debt eliminated. By wiping out your credit card debt, your credit rating is no longer reduced due to late payments or accounts in default. Although a Chapter 7 bankruptcy appears on your credit report for up to 10 years, it does not affect your rating after the initial impact. Many people are able to qualify for auto loans and mortgages within three years of filing for Chapter 7 bankruptcy protection.
Contact Reedy Law Office Today
To learn more about how Chapter 7 bankruptcy can help you overcome suffocating credit card debt, call our Schuylkill Haven office at 570-593-0076 or fill out our online contact form.