People from all over the country are finding themselves bankrupt as the result of overusing their credit cards. Credit cards have been around for decades but the credit boom of the 1990s saw many Americans abusing credit and digging themselves into debt. Add that to the influx of credit card companies soliciting financially ignorant college students and you have an all-encompassing credit card debt problem in this country.
The economic recession that has plagued the U.S. in recent years as well as the lack of adequate healthcare and foreclosure crisis have all contributed to Americans overusing credit cards beyond their means. As a result, many are turning to bankruptcy as a way out. Why is bankruptcy an attractive alternative to credit card debt?
• Serves as protection from your creditors
• Chapter 7 requires liquidating your nonexempt assets but since most consumers can make most if not all of their assets exempt then this can be relatively minor
• Credit card debt is typically discharged at the end of the bankruptcy which means the debtor is no longer legally obligated to pay it
So unlike other types of non-dischargeable debt, filing bankruptcy to get rid of credit card debt is something many Americans do because of the fact it can be done at very little expense compared to other types of debt and bankruptcy situations. Keep in mind that it will take up to 10 years to repair your credit after filing bankruptcy.
More to Learn About Credit Cards and Bankruptcy
While some creditors will go quietly into the night after seeing their loan get discharged in a bankruptcy case, others may file an adversary proceeding to challenge the discharge in an attempt to recoup their losses. Talk to a licensed bankruptcy attorney in your area today about credit cards and bankruptcy.
