Filing for credit card bankruptcy can help to alleviate the burden of unmanageable personal debt in as little as 4 months. Unlike a debt settlement program, chapter 7 bankruptcy doesn’t require a monthly contribution. This means that eliminating credit card debt is possible for those who have lost their jobs or don’t have sufficient disposable income to offer creditors a repayment plan. Whilst readers are advised to seek advice and guidance from an attorney, this article will outline the basics of the legal process.
Who Can File for Chapter 7 Credit Card Bankruptcy?
The bankruptcy laws for eliminating credit card debt were changed in 2005 by the Bankruptcy Abuse Prevention and Consumer Protection Act 2005. It is now necessary to pass a means test. The person’s average income over the last 6 months must be below the state median. However, an attorney may be able to legally reduce their client’s earnings. In order to file chapter 7 credit card debt bankruptcy, it is necessary to hand over any non-exempt assets, such as a second home, jewelry or a valuable collection, to a trustee in order that they can be sold to raise money for creditors.