Nearly 40 percent of Americans carry debt from month to month on their credit cards, reports a 2012 study conducted by the National Foundation for Credit Counseling. While many of these people are able to make the monthly payments on their credit card debt, when factors like the loss of a job, unexpected medical expenses or divorce arise, this debt can quickly snowball, leaving people struggling to reign it in while trying to cover their living expenses.
Despite how financially and emotional stressful credit card debt can be, the good news is that people have options for resolving this debt and can achieve a financial fresh start through bankruptcy.
Discharging Credit Card Debt through Bankruptcy
Credit card debt is considered to be “unsecured debt.” This means that people do not have to put up any collateral in order to take out a credit card and that credit card companies don’t have collateral to cash in when people fail to pay on their credit debt. Instead, these companies can attempt to sue borrowers and get their wages garnished.
However, when people file for Chapter 7 bankruptcy:
- Their outstanding credit card debt will be discharged. This effective means that the debt will be cancelled or forgiven.
- Credit card companies can no longer contact these borrowers for payment.
- Credit card companies cannot take additional measures, like filing lawsuits or attempting to garnish borrowers’ wages, in order to force borrowers to pay this debt.
However, it is important that borrowers realize that, when they are considering or preparing to file for Chapter 7 bankruptcy:
- They cannot run up their credit card debt immediately prior to filing, as this is considered to be a form of bankruptcy fraud.
- They may have to liquidate some of their assets to attempt to pay back some of their discharged credit card debt.
- They will have to deal with some impacts to their credit score, and it could take them months (or potentially even years) to get their credit back on track, as they will essentially have to start all over.
The Experienced Denver Bankruptcy Lawyer at Lindquist-Kleissler & Company, LLC
If you are buried in credit card debt and are ready to explore your options for resolving this debt, it’s time to contact Denver Bankruptcy Lawyer Arthur Lindquist-Kleissler. Since 1979, Mr. Lindquist-Kleissler and the other legal professionals at Lindquist-Kleissler & Company, LLC have been providing both individuals and businesses with the highest quality of legal services when it comes to debt relief and bankruptcy (including civil litigation matters associated with bankruptcy).
From simple financial issues to complex bankruptcy cases, Mr. Lindquist-Kleissler can always be trusted to:
- Tailor his services to each client’s specific needs
- Bring a fresh perspective to each case
- Examine non-traditional options for resolving their cases
- Effectively guide his clients through bankruptcy, when this is the best option for them
- Help each of his clients achieve the best possible outcomes to their cases in the most efficient manner possible.
Contact Us for a Free Consult
For a free 30-minute consult and a free bankruptcy packet, contact us by calling (303) 691-9774, or email us using the form on this page. You will pay nothing up front to obtain trusted, professional advice regarding your case and your options.
From our office in Denver, Arthur Lindquist-Kleissler represents clients throughout the Great Denver Metropolitan area and Colorado, including (but not limited to) Aurora and Arapahoe County.