• 4560 S. Decatur Blvd. Suite 302, Las Vegas, NV 89103
  • 702-252-4673
  • hope@deluca-associates.com
Facebook-f
Twitter
Yelp
  • Home
  • Services
    • Chapter 7 Bankruptcy
    • Chapter 13 Bankruptcy
  • About Us
    • Anthony DeLuca
  • Testimonials
  • Blog
  • Contact
Menu
  • Home
  • Services
    • Chapter 7 Bankruptcy
    • Chapter 13 Bankruptcy
  • About Us
    • Anthony DeLuca
  • Testimonials
  • Blog
  • Contact

Filing Bankruptcy On Credit Cards: When Are You Off The Hook?

Most people file Chapter 7 bankruptcy to get a fresh start with their lives and discharge their debts. And most credit card debts can be discharged through a Chapter 7 bankruptcy, meaning you will no longer have to pay them back once your bankruptcy claim is completed. Just as you had to build your credit score when you got your first credit card, you will need to rebuild your credit score after bankruptcy. The good news is that typically, unless there is fraud involved, the consequences don’t extend beyond that since credit card debt in a Chapter 7 bankruptcy is considered an unsecured debt (an obligation sans collateral). Here are the following ways your credit card debt may be handled when you file a Chapter 7 bankruptcy.
The Credit Card trap

Photo courtesy of v i p e z

The Trustee Pays the Creditors From Your Bankruptcy Estate

Typically, when you file a bankruptcy case, a bankruptcy estate is created. This includes all your legal and equitable interests, as well as your intangible and tangible assets. During a case, this is handed over to a trustee to pay back your creditors.  However, in Chapter 7 bankruptcies there are usually “no assets.” This mean there is no property available to be liquidated to pay off the debt. That means the only items left are money assets.
Credit card debts and most unsecured debt are classified as  non-priority claims. If your bankruptcy estate has enough money (unlikely), the Chapter 7 trustee may pay back your unsecured claims. Any payments that can be made at the end of it all are distributed with each unsecured creditor (credit card company included) receiving equal percentages. This typically amounts to 0% or a few pennies for every dollar owed.

Credit Card Debt That Cannot Be Discharged

If you have incurred your credit card debt through fraud such as false pretenses and misrepresentation, your debt is not dischargeable. For example:

  1.  If within 75 days, you use a credit card to obtain over $925 in cash advances, this debt will be non-dischargeable regardless of whether or not you use the money for necessities or luxury goods.
  2.  If within 90 days of filing bankruptcy you purchase over $650 in luxury goods on a single credit card, this debt will be non-dischargeable. Luxury goods do not include anything necessary for your maintenance or support of you or your dependents. For example: food, clothing, and gasoline.

Disputing Non-Dischargeable Credit Debt

In order for a credit card company to argue that your debt is nondischargeable, they must (within 60 days of the first meeting of the creditors), file a complaint with the bankruptcy court. If they do not do this, the above fraudulent cases may still be discharged. In addition, after a complaint for non-dischargeability is filed by a creditor, you may file a dispute against the claim. There will then be a court hearing to determine whether or not your debt is dischargeable.
It pays to be aware of the bankruptcy process well before filing. Since the process is time sensitive and can become complicated, it’s best to seek advice from an experienced bankruptcy lawyer as soon as possible.
If you are feeling overwhelmed by credit card debt, and would like to discuss your options, contact Las Vegas bankruptcy attorney Anthony DeLuca at (702) 252-4673 for a free consultation.

If you liked this post, you might also like:

debt over timeBankruptcy And Child Support: What You Need to Know
debt
Can You File Bankruptcy On IRS Debt?
twisting dollarWhy Americans Are Carrying Less Credit Card Debt

Featured photo courtesy of 123rf

Get a FREE Consultation

Set up your free consultation with Attorney Anthony DeLuca or one of his associates to go over your Las Vegas bankruptcy.

Request Consultation

Request Information

Recent Posts

Can Lenders Ignore Bankruptcy Court Discharges?

September 18, 2015

When Banks Fail to Comply: Don’t Repay Discharged Debt

November 14, 2014

Tips For Filing Taxes After Bankruptcy

November 13, 2014

About Us

Representing thousands of clients since being founded in 2001 by attorney Anthony Deluca, DeLuca & Associates remains established as the premier consumer bankruptcy law firm in Nevada.

Contact Us

DeLuca & Associates
Bankruptcy Law Firm Serving Nevada

4560 S. Decatur Blvd. Suite 302
Las Vegas, NV 89103

(702) 252-4673
hope@deluca-associates.com

Connect + Follow

Facebook-f
Twitter
Yelp

Privacy Policy | Sitemap