Can I Wipe Out Credit Card Debt in Bankruptcy?
Yes, you can! In my Alameda bankruptcy office, I would say that credit cards are the biggest reason my clients file for bankruptcy. They have been struggling for years to pay off credit cards with huge interest rates while at the same time trying to put food on the table and new socks and shoes on their kids’ feet. The problem of course is that when hundreds or even thousands of dollars each month go to credit card interest instead of household expenses, Average Joe and Jane are left with little choice but to pay the basics like clothes, food, gas and insurance with the same credit cards they’re trying to pay off. As many of us know, it’s a vicious cycle.
Over the years, a lot of very bad information about bankruptcy has slithered its way into our collective brains and doesn’t seem to want to leave. One of the biggest falsehoods is that bankruptcy no longer wipes out credit card debt. This myth surfaced in a big way in 2005 when Congress passed big changes to the bankruptcy laws. There was a lot of frantic scurrying about and a lot of bankruptcy cases filed because people had it in their heads that credit cards would no longer be discharged (wiped out) in bankruptcy. That wasn’t true then it still isn’t true.
Again, the short answer is that credit cards can be wiped out in bankruptcy here in Alameda.
A warning: Just because credit cards debt can be wiped out in bankruptcy does not mean that you can go out and charge up all your cards and then head into an attorney’s office to file a bankruptcy case and wipe them out without any problem. If you make major charges on cards in the months leading up to a bankruptcy filing, the credit card companies may choose to file lawsuits against you in the local bankruptcy court in Oakland and try to convince the court that you made all those charges without any intent to repay. This is considered a type of fraud. If the bankruptcy judge here in Alameda County agrees with the credit card companies, the judge can declare that one or more of your debts does not get wiped out even though you filed a bankruptcy case.
If you are considering bankruptcy, you should be very careful about credit card use. You should also consider speaking with an experienced Alameda bankruptcy attorney about the charges you have already made on your cards.
Alameda bankruptcy attorney James Pixton is an expert at deciphering credit card issues and can give you an idea of whether you need to worry about particular accounts or charges. He can also help you come up with a game plan to decrease the likelihood that you’ll have problems if you go forward with a bankruptcy case.
To contact bankruptcy attorney James Pixton, give him a call at (510) 451-6200 x101. Or just complete the contact form on this page.