Credit Card Debt Bankruptcy - Will Declaring Bankruptcy Wipe Out All Your Debts? Find Out Here


Those with excessive bills to pay every month, largely due to credit card debt commonly ask for information regarding credit card debt bankruptcy. Well, the first thing to note is that 'credit card debt bankruptcy' does not exist. It is merely bankruptcy regardless of the types of debt you wish to eradicate. And while it is true that many cases of people filing are now related to credit card debt, there is no special allowance or special type of bankruptcy for this.

While bankruptcy is a valid and legitimate way for many of solving their financial problems, it will not be ideal for everyone. In fact, after extensive lobbying in 2005 by credit companies, Congress passed a number of changes to the bankruptcy laws, which essentially make it incredibly more complicated when it comes to filing for bankruptcy and these changes made the law notoriously difficult to deal with even for legal professionals. As such, you will almost invariably need to hire a bankruptcy lawyer with expertise in this area. And even with a lawyer, there is a good possibility that, if you earn over the median income for the state in which you are filing, you may be deemed ineligible for chapter 7 bankruptcy and ordered to declare chapter 13 instead. And what is the difference? Well, while chapter 7 bankruptcy will wipe out many of your debts, chapter 13 simply restructures their repayment and gives you a monthly amount to pay each month under court order.

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Yet both of these have the same negative impact on your credit rating. So you could potentially be in a worse position if you find yourself ordered to declare chapter 13. It would mean that you still have these debts to pay, albeit most likely with reduced interest rates and service charges wiped out, but you would also have a negative mark on your credit file as well.


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