Estimated Reading Time: 6 minutes
Table of Contents
- How Bankruptcy Treats Credit Card Debt
- When Credit Card Debt May Not Be Dischargeable
- Life After Bankruptcy
- How Our Bankruptcy Attorneys Can Assist You
Credit card debt can build up quickly, especially when interest rates climb and minimum payments barely reduce the balance. Many people find themselves stuck in a cycle where the numbers keep rising despite their best efforts. This type of financial pressure can make it difficult to focus, sleep, or plan ahead. When the stress becomes too much, it is natural to wonder whether bankruptcy can offer real relief. The good news is that it often can.
Bankruptcy is not a sign of failure or a situation that should bring shame. It is a legal remedy created specifically to help individuals regain control of their financial lives. With the right information, it becomes easier to decide whether filing is a practical step toward stability and a healthier financial future.
How Bankruptcy Treats Credit Card Debt
Credit card debt is treated as unsecured debt, which means it is not backed by collateral such as a home or a vehicle. Because of this, credit card balances are often among the easiest types of debt to eliminate through bankruptcy.
There are two common types of bankruptcy for consumers.
Chapter 7 Bankruptcy
Chapter 7 allows individuals to discharge many forms of unsecured debt, including most credit card balances. Once the case is complete, qualifying credit card debt is wiped out. Collection calls stop, lawsuits are halted, and the financial pressure begins to ease. This type of bankruptcy is often suited for people with limited income or those who simply cannot keep up with their financial obligations.
Chapter 13 Bankruptcy
Chapter 13 works differently. Instead of immediately eliminating debt, it creates a repayment plan that lasts three to five years. Credit card debt is included in this plan, often with a reduced repayment amount. After the repayment period is complete, remaining qualifying credit card balances may be discharged. This option is ideal for people who earn a steady income but need an organized way to manage their debt.
When Credit Card Debt May Not Be Dischargeable
Although bankruptcy is a powerful tool, there are situations where certain credit card charges may not qualify for discharge. This may occur if:
- The charges were made through fraud, such as using a card while knowing repayment was not possible
- There were recent luxury purchases charged to the card
- Cash advances were taken shortly before filing
These situations are reviewed individually. Even when exceptions apply, many people still find that the majority of their credit card debt can be handled through bankruptcy. A bankruptcy attorney can help determine how the rules apply to your specific circumstances.
Life After Bankruptcy
A common misconception is that bankruptcy destroys a person’s financial future. In reality, many people begin rebuilding their credit soon after their case is complete. With overwhelming credit card debt discharged or restructured, it becomes easier to manage a budget, rebuild savings, and work toward long-term goals.
People often find they experience:
- Reduced financial stress
- More room in the monthly budget
- An easier path toward improving credit
- Greater stability and control
Bankruptcy exists for a reason. It is a legal opportunity for a fresh start and a chance to rebuild without the constant weight of unmanageable debt.
How Our Bankruptcy Attorneys Can Assist You
If you are considering bankruptcy as a way to address credit card debt, the right support can make the process clearer and less intimidating. Buchalter & Pelphrey has more than 50 years of combined experience guiding individuals through complex financial situations. Our team has filed thousands of bankruptcy cases and is highly recommended by clients who have achieved meaningful relief.
We provide:
- Personalized strategies that fit your financial needs
- Consistent support from the first consultation to the final resolution
- Clear explanations so that you can make confident decisions
- Skilled representation in challenging financial matters
Financial pressure can feel overwhelming, but relief is possible. Buchalter & Pelphrey is ready to help you understand your options and move toward a brighter financial future with guidance you can trust.
Take the first step toward financial relief by reaching out to Buchalter & Pelphrey at (321) 320-6088 for a consultation. Our team is ready to help you understand your options and move forward with a solution that truly supports your goals.