{"id":3481,"date":"2020-10-30T13:58:22","date_gmt":"2020-10-30T13:58:22","guid":{"rendered":"https:\/\/phoenixfreshstartbankruptcy.com\/?p=3481"},"modified":"2022-08-18T09:11:19","modified_gmt":"2022-08-18T09:11:19","slug":"what-happens-to-credit-card-debts-in-a-bankruptcy-case","status":"publish","type":"post","link":"https:\/\/phoenixfreshstartbankruptcy.com\/what-happens-to-credit-card-debts-in-a-bankruptcy-case\/","title":{"rendered":"What Happens to Credit Card Debts in a Bankruptcy Case?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Are you dealing with credit card debts? Is your income below the state median salary? If so, filing a Chapter 7 bankruptcy petition can be your way out. Many debtors who file for this type of bankruptcy have their debts wiped out by the court, but this is not always the case. While most people file for debt relief due to financial problems, others may not have their balances discharged when it is proven that their card purchases are fraudulent, among other things.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To help you deal with your debt problems, below are several scenarios you can expect to occur if you fall behind on credit card payments. If you need more guidance to understand what a Chapter 7 bankruptcy entails, it is important to get the facts from a licensed <\/span><a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/best-phoenix-bankruptcy-attorneys\/bankruptcy-filing-basics\/\"><b>bankruptcy attorney<\/b><\/a><span style=\"font-weight: 400;\"> rather than a family member or friend.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Credit_Card_Debts_Before_You_File_for_Bankruptcy\"><\/span><span style=\"font-weight: 400;\">Credit Card Debts Before You File for Bankruptcy<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-662730da6d1d7\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662730da6d1d7\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/what-happens-to-credit-card-debts-in-a-bankruptcy-case\/#Credit_Card_Debts_Before_You_File_for_Bankruptcy\" title=\"Credit Card Debts Before You File for Bankruptcy\">Credit Card Debts Before You File for Bankruptcy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/what-happens-to-credit-card-debts-in-a-bankruptcy-case\/#Credit_Card_Debts_After_You_File_Bankruptcy\" title=\"Credit Card Debts After You File Bankruptcy\">Credit Card Debts After You File Bankruptcy<\/a><\/li><\/ul><\/nav><\/div>\n\n<p><span style=\"font-weight: 400;\">When your credit card company notices that you have been paying your dues on time for a certain period, you can face any of the scenarios below.\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Card companies charge owners with a higher interest rate which results in a higher account balance since paying back your dues will mostly go to the interest.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The debtor owes a higher amount as the company charges him with late fees\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A borrower experiences creditor harassment from a debt collector who will likely call you repeatedly. This is one of the top reasons why borrowers that have not been making payments for a long time are considering filing for Chapter 7 bankruptcy.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The credit card account won\u2019t remain open unless the company allows you to. Sometimes, even when you pay off your balance, the credit card provider can still close your account especially when they learn about a bankruptcy filing through one of the credit reporting agencies.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">You receive a debt collection lawsuit where the company demands payment. If you get sued, state laws only give you a certain time to respond before the company asks a judge for a default judgment. This courthouse judgment will be recorded and shall incur interest until it is fully paid.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Proceeds of property sales may go to the judgment on your credit card debts.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Credit_Card_Debts_After_You_File_Bankruptcy\"><\/span><span style=\"font-weight: 400;\">Credit Card Debts After You File Bankruptcy<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><img decoding=\"async\" class=\"alignright wp-image-3483 \" src=\"https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/10\/for-credit-cards-300x225.jpg\" alt=\"Bankruptcy for credit cards\" width=\"356\" height=\"267\" srcset=\"https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/10\/for-credit-cards-200x150.jpg 200w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/10\/for-credit-cards-300x225.jpg 300w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/10\/for-credit-cards-400x300.jpg 400w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/10\/for-credit-cards-600x450.jpg 600w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/10\/for-credit-cards.jpg 626w\" sizes=\"(max-width: 356px) 100vw, 356px\" \/>The scenarios stated above are only some of the reasons why it is a good idea to consider a <a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/chapter-7\/\">Chapter 7 bankruptcy filing<\/a>. Most personal bankruptcies don\u2019t require the filer to give up assets in exchange for debt relief. Since <a href=\"\/credit-card-debt\/\">credit card debts<\/a> are considered nonpriority claims in a bankruptcy estate, most borrowers won\u2019t have to pay a single dime to their credit company.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Oe of the most common scenarios that occur after filing bankruptcy is that you receive a discharge order which states that you no longer have the financial obligation to pay back your credit card company. While most credit debt obligations are eliminated, in some cases it is also possible that the bankruptcy trustee pays your creditors what is owed.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You must also be prepared to face any of the following negative outcomes as a result of a long-record of missed card payments.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Lenders also have the right to file a complaint to the bankruptcy judge and argue that your credit card\u2019s past-due is nondischargeable. However, for this process to work, a creditor must challenge the dischargeability of your debt within sixty days after the meeting with creditors.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">You may be required to attend a hearing with your bankruptcy lawyer and face your creditor if they file a nondischargeability complaint and you filed an objection to their claims<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The discharge order will wipe out your debts but will not cover cosigners or guarantors. This means that if you have a cosigner or a guarantor, your creditor can go after them and oblige them to fulfill their debt repayment obligation.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If the card balance was proven to be caused by fraudulent activity, such as giving false information, misrepresenting data, or making pretenses, then the bankruptcy court can still retain the filers\u2019 obligation even after bankruptcy cases are closed.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The following types of purchases can be deemed fraudulent: luxury goods and cash advances. This includes luxurious goods that were bought with only one credit card or bought immediately after filing for bankruptcy. Only necessary goods and services such as food, clothing, and other living expenses can be deemed as dischargeable debts in court.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Moreover, cash advances above a certain value that is filed close to your bankruptcy application date can be presumed nondischargeable. Under the bankruptcy law, the only exemption to discharging purchases falling under these categories is when you can prove that the value is within specified limits and that there was the intent to repay the products bought.\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Have you decided to file for Chapter 7 bankruptcy but need help understanding the bankruptcy process? Contact <\/span><\/i><b><i>Phoenix Fresh Start Bankruptcy Attorneys <\/i><\/b><i><span style=\"font-weight: 400;\">today.\u00a0<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">Bankruptcy laws can be daunting especially when you have to consider specific debts such as credit card debt. Our <a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/\">bankruptcy lawyers<\/a> can evaluate your financial situation for free and help you find the best debt solution that works for you.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you dealing with credit card debts? Is your income below the state median salary? If so, filing a Chapter 7 bankruptcy petition can be your way out. Many debtors who file for this type of bankruptcy have their debts wiped out by the court, but this is not always the case. While most people file for debt relief due to financial problems, others may not have their balances discharged when it is proven that their card purchases are fraudulent, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3482,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts\/3481"}],"collection":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/comments?post=3481"}],"version-history":[{"count":1,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts\/3481\/revisions"}],"predecessor-version":[{"id":4446,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts\/3481\/revisions\/4446"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/media\/3482"}],"wp:attachment":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/media?parent=3481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/categories?post=3481"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/tags?post=3481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}