People rarely use cash to pay for anything these days. Credit cards make consumers’ lives easier, especially now that a wave of your smart phone or watch allows you to walk away with whatever your heart desires. Unfortunately, this ease of use can lead to trouble, especially if your income can’t keep up with your spending or your needs and your credit card debt has grown out of control. Beyond shopping, if you need to pay a medical bill or have your car repaired or pay for your child’s orthodontia and you don’t have cash in the bank, a credit card quickly takes care of the problem, until the bill appears. If what you can afford to pay falls short of what you owe, the interest rate or late fees only make things worse. Bankruptcy can provide a way out.

Whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy will be determined by your financial situation, but both can provide relief from credit card debt. Chapter 7 eliminates all unsecured, nonpriority debt, and this includes credit cards as well as medical bills and personal loans as long as no fraud was involved. If your income is too high for Chapter 7 and you qualify to file for a Chapter 13 bankruptcy then your debts will be reorganized, and this means that you will be provided with a repayment plan that usually both lowers the amount that you owe and gives you more time to pay it off.

One thing that you must keep in mind when considering a bankruptcy filing is that you can’t use it as an excuse to run up your credit card bills. Bankruptcy is a chance to start over but it is not a free pass. If you go into a single store and charge more than $725 on a purchase or service within 90 days of filing for bankruptcy, it will be viewed as fraud, and the same is true if you get a cash advance of more than $1,000 within 70 days of your filing. If you are thinking of filing for bankruptcy, you should stop using your credit card for anything other than necessities to avoid any suggestion of impropriety that would be viewed poorly by the bankruptcy court.

If you are considering a bankruptcy filing and need guidance, contact our experienced bankruptcy law firm today. We are here to help.