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Irvine Bankruptcy Lawyer / Credit Card Debt Bankruptcy

If you are bogged down with credit card debt, you are not alone. The average American carries a balance on their credit cards between $5,733 and $7,279, depending on who you ask, and Americans as a whole currently carry well over one trillion dollars in credit card debt. That is truly an astonishing figure, and it is only trending higher. The average bankruptcy filer carries an even higher amount of credit card debt, proving that credit card debt is a major factor, although not the only factor, in most consumer bankruptcies.

The good news is that credit card debt can be dealt with effectively in Chapter 7 or Chapter 13 bankruptcy. With the protection afforded by bankruptcy, you can rid yourself of this overly burdensome debt and make a fresh start. The Law Office of Charles A. May can help. We work with consumers in Orange County, Los Angeles and throughout Southern California to get effective, affordable debt relief through consumer bankruptcy options. Contact our skilled and knowledgeable lawyer today to find out how bankruptcy can help you deal effectively with the burden of overwhelming credit card debt.

How Credit Cards Get Out of Hand

Some people probably do overspend or make too many frivolous purchases on things they do not need, but that is not the only reason credit card spending sends people into debt. The credit card companies themselves encourage cardholders to use their credit cards for everything, not just one-time shopping purchases but also recurring monthly expenses for necessities like groceries, gas and utilities. You can even set up automatic payments on your credit card for your cable bill, phone bill, electric bill, insurance, and more.

The credit card companies highlight how easy this makes it to manage your expenses by putting everything on the card and only dealing with one monthly payment. They even reward you with points, miles, or one percent back in cash for the things you charge. If you get close to your credit limit, they oftentimes just raise it so you can keep spending. They do not seem to care if you ever pay off the card. All you have to do is make a minimum monthly payment. Meanwhile, your balance grows not just from the purchases you make but from interest rates as high as 24%.

When your minimum monthly payment is more than 10% of your monthly take-home pay, simply keeping up with the minimum payment is hard enough, never mind paying down the balance or ever paying it off entirely. Fees for missed or late payments create an additional pain point you may be ill-equipped to deal with.

How Bankruptcy Can Help

Credit card debt is unsecured. A secured debt is one that is backed by collateral that the lender can take if the debtor defaults. For example, a home mortgage, car loan, or major appliance or luxury item that is financed is secured by the home, car, or big-screen TV itself, and if the buyer defaults, the lender can foreclose or repossess the property. There is no such collateral in the case of credit card debt, putting it into the category of unsecured debt along with medical bills and personal loans.

Unsecured debt is dischargeable in bankruptcy, meaning you will not be held responsible for paying it. In Chapter 7, the bankruptcy trustee can seize non-exempt property and sell it to pay off your creditors before discharging debt, but if you work with a knowledgeable bankruptcy attorney who understands the California bankruptcy exemptions, you may be able to exempt all of your property and obtain a “no-asset” bankruptcy where your credit card debt and other unsecured debts get eliminated without you losing any property.

Debtors in Chapter 13 bankruptcy are required to pay only a small portion of their unsecured debt as part of their debt adjustment repayment plan, and the rest is eliminated at the end of the bankruptcy period. Chapter 13 can therefore be an effective way to deal with credit card debt if you do not qualify for Chapter 7 or if other factors make Chapter 13 better for you overall.

Contact The Law Office of Charles A. May for Help With Credit Card Debt and Bankruptcy

Credit card companies are always after you to transfer your balances from other cards and take advantage of a low introductory rate, and to use your card everywhere you go for every purchase you make. Even in normal times, credit card balances can grow so large that you can never realistically pay them off. On top of that, a job loss, medical setback, or large emergency expense could easily send your finances into a tailspin. When something like that happens, or even before it does, The Law Office of Charles A. May can help. Our dedicated bankruptcy lawyer can help you understand your options to deal with credit card debt and make a fresh start through Chapter 7 or Chapter 13 bankruptcy. Call us today for a free consultation so we can get you back on the right track.

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