Having a credit card can be a major problem if you are not taking control of the amount of money that you owe. If you rack up the number of credit cards that you have and max them out, it's highly unlikely that you are going to be able to pay those back right away. In fact, it can take up to ten years or more for you to completely wipe it out, even if you only owe $1,000. If you are having problems with credit card debt, you may be considering filing for bankruptcy. Here's what you should know about doing this:
Filing Chapter 7 Bankruptcy:
In Chapter 7 bankruptcy, you are able to completely liquidate your credit card debt. This is a great option if you cannot afford what you owe. You won't be able to give the credit card company any property that you own because they have no right to it, so this is the best way possible to completely wipe that debt from your hands and start fresh. Of course, you will have to rebuild your credit significantly from this point, but when you work with a bankruptcy attorney or credit counselors, it shouldn't take long before you are on your feet once again.
Filing Chapter 13 Bankruptcy:
In Chapter 13 bankruptcy, you are able to set up repayment plans with your credit card company. These are typically set up to be paid within five years. Basically, the credit card company will have a right to all your disposable income. If the debt still isn't paid within those five years, which can happen if your income is too low, the debt will be completely wiped.
Committing fraud will not allow you to file for bankruptcy whatsoever. If you max out any credit cards right before you file for bankruptcy, for example, will be looked into and will likely end up in you being denied the ability to file for bankruptcy. You also should not take out any cash advances within a certain amount of time before filing or purchase any high priced items. All of these situations will likely be challenged and put you in a worse financial situation if you are denied to file for bankruptcy in the end.
By knowing these things about credit cards and filing for bankruptcy, you can see whether or not it would ultimately be in your best interest to file for bankruptcy based on the amount of credit card debt that you have.