Many people do not realize it, but a Chapter 7 bankruptcy eliminates unsecured debts, including medical bills and credit card debt.
Among other things, this form of bankruptcy also places an end to collection attempts, as it triggers an “automatic stay” that puts a stop to these irritating forms of communication as you work with your bankruptcy attorney. Additionally, in most circumstances, an automatic stay will put a halt to lawsuits.
Recently, Danielle Staub, a former reality television star on the Real Housewives of New Jersey filed for Chapter 7 bankruptcy. In her filing, Staub was reportedly able to discharge $7,000 worth of debt from Nordstrom’s, $7,000 from American Express and $30,000 in old legal fees. As a part of her case, she is also selling off her New Jersey home.
How Can I Eliminate My Credit Card Debt?
As we mentioned above, you can eliminate several debts through a Chapter 7 bankruptcy. However, some forms of debt may be non-dischargeable, including student loans, tax debt and any fraudulent/criminal charges.
To file for Chapter 7 bankruptcy, you must be able to pass a “means test” that examines your income and helps you decide if you would be able to afford a payment plan agreed upon through Chapter 13 bankruptcy. Keep in mind, if you are unable to file for Chapter 7 bankruptcy because of eligibility issues, you can always file for Chapter 13 bankruptcy.
To obtain debt discharge in a Chapter 7 bankruptcy, a debtor may not have had his or her debts discharged within the past eight years. In addition, a person must have completed a personal financial management class pursuant to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
If you have any questions about bankruptcy, and how it could help you eliminate your credit card debt, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.
Our attorney currently serves on the Local Rules Advisory Committee for the United States Bankruptcy Court for the District of Columbia. He is a Past Chairman of the Bankruptcy Law Section for the National Bar Association.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: The Office of the U.S. Trustee reviews every Chapter 7 bankruptcy filing for possible fraud or abuse.