The Law Offices of Paolo M. Newman, PLLC

Charlotte's Bankruptcy Attorney | 428 E 4th Street, Suite 404 Charlotte, NC 28202

Credit Card Debt and the Bankruptcy Process



Discharging Credit Card Debt in Bankruptcy

Are you having difficulty making the minimum payments on your credit card debt? Are you receiving annoying calls from creditors at home, at work or on your cell phone?  Have you been served with a debt collection lawsuit?  Are you using one credit card in order to make the payment for another credit card?  Have you started using your credit card(s) to pay for your basic living expenses?  If this is the case, now is the time to consider filing bankruptcy.

Directly Addressing the Problem

It is very easy to become overwhelmed with credit card debt.  You may have lost a job; suffered a serious infirmity; lost a loved one; or simply mismanaged your credit card usage.  Irrespective of the reason why you cannot pay your credit card debt, filing bankruptcy may be the optimal course of action.  When you have no income left at the end of the month to pay credit card debt after paying your living expenses, borrowing extra money, refinancing debt—the utilization of a debt consolidation company will not directly confront your debt problem.  The true problem is that you do not have enough income to pay your credit card debt.  Filing bankruptcy can assist.  The bankruptcy system provides a fresh start to the honest but unfortunate debtor.[1]

Bankruptcy Exterminates Credit Card Debt

When you file bankruptcy, your creditors are barred from any collective actions, including filing a debt collection lawsuit.  This protection is triggered as soon as you file, and continues through the duration of your bankruptcy case.[2]

Credit card debt is unsecured debt—the creditor has not attached a security device in the form of a lien or mortgage to any of your assets[3].  Since credit card debt is unsecured debt,  it can be eliminated without paying anything back to the credit card company (or only paying cents on the dollar).

In a Chapter 7 bankruptcy case, credit card debt is discharged (wiped out) at the conclusion of your case.  In the typical Chapter 7 bankruptcy case, you have no obligation to repay any of this debt.  In a Chapter 13 bankruptcy case, you may be obligated to repay a portion of the credit card debt.  The amount you will be required to pay will depend upon multiple factors including: 1) income; 2) expenses; 3) assets; and 4) debts.  In most scenarios, you will only repay a small percentage of credit card debt extended over a 5-year bankruptcy plan.  Once your bankruptcy plan is completed, the credit card debt is discharged—in other words, you will no longer owe any of the remaining credit card debt.

The bankruptcy discharge prevents creditors from pursuing collection action on any portion of the discharged debt.  If this discharge order is violated, the creditor can face consequences for contempt—the sanctions may include fines, attorney’s fees and/or damages assessed by the bankruptcy court.

Contact a Capable North Carolina Bankruptcy Attorney

I have helped others in your situation file for bankruptcy.  Helping to relieve the financial burden debt brings is what I do.   If you are ready to build a better life for yourself and your family, don’t hesitate to contact me by phone, text or email.


[1] Debtors who are forthcoming regarding their income and assets.

[2] 11 U.S.C. § 362—Automatic stay.

[3] E.g., real estate or an automobile.


Disclaimer: This site is for general informational purposes only and does not create an attorney-client relationship with you. The information contained at this site is not, nor is it intended to be, legal advice. Some of the information on this site may be or may become out of date due to changes in the law and other factors. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters, and email. However, contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

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