Jacksonville Credit Card Debt Lawyer
Credit card debt can add up fast. While there are cases where a person goes on shopping sprees and racks up enormous credit card bills, in many cases, the purchases that lead to the large and daunting debt are everyday necessities like food, utilities, and gas. When a credit card has high-interest payments, cardholders may find themselves shocked by the quickly ballooning statements. You might reach a point where even making the minimum payment, which is doing little to pay down the debt, becomes unfeasible.
The law provides protections for people who find themselves in financial hardship. Filing for bankruptcy can help many borrowers free themselves from unpayable debt. There are restrictions and legal requirements for filing for bankruptcy, and different chapters of the bankruptcy laws lead to varying results. If you face insurmountable credit card debt, it is time to consult with an experienced Jacksonville credit card debt lawyer. Call the Law Offices of Carol M. Galloway at 904-694-5489 to learn how we can help you get a fresh start.
Chapter 7 and Credit Card Debt
For many individuals, filing Chapter 7 bankruptcy is the best option. Chapter 7 can lead to the complete elimination of some or all of a person’s credit card debt. Only certain people can meet the criteria for Chapter 7 bankruptcy, though. All individuals filing Chapter 7 must complete a means test analysis so that the court can decide whether they are truly unable to pay their debts. The reason for this is to ensure that high-earning individuals do not use bankruptcy to relieve debts that are inconvenient but payable.
There are many other considerations in filing Chapter 7 such as assets that may not be protected, transfers of property to other persons before filing bankruptcy and payments made to family members or friends to the detriment of creditors.
If you make less than the median income for your household size, you will likely have the opportunity to file under Chapter 7. If you cannot meet the conditions for Chapter 7, you could still benefit from another form of bankruptcy. It is a good idea to speak to an experienced bankruptcy attorney about your needs. The Law Offices of Carol M. Galloway in Jacksonville offers a free initial consultation to review your situation and advise you of your options.
What if the Credit Card Debt Can’t Be Discharged
Sometimes, credit card debts are not dischargeable in bankruptcy, such as when the law views the debts as fraudulent. For example, if you filed for bankruptcy one week after buying a $10,000 home entertainment system on your credit cards, the court will likely refuse to allow you to discharge that debt. In fact, if you spend more than $725 on any luxury items purchased on credit from one creditor within 90 days of filing for bankruptcy, the court will assume that your purchases are fraudulent, and you will have to find a way to repay those debts. Courts also assume fraud when a borrower takes more than $1,000 cash advance on a card 70 days or less before filing.
Any fraud carried out on a credit card application can also prevent the discharge of debts under Chapter 7. For instance, if you provided false material information, like inflated income on the application, the creditor can challenge your right to discharge the debt.
It is also important to ensure that your credit card contract does not include any security interests. This practice is not common, but it can lead to the creditor obtaining some of your property as a way to offset your debts.
Anyone considering filing for Chapter 7 bankruptcy should speak to a lawyer to learn their rights and obligations. You might have non-dischargeable debts, such as child support, taxes, or student loans, that will impact the usefulness of filing for Chapter 7. Additionally, if you have assets you want to maintain ownership of, such as a car or your home, you should ensure that your bankruptcy provides a way to protect those items. It might be that you will benefit from filing under Chapter 13 instead.
Chapter 13 Bankruptcy and Credit Card Debt in Jacksonville
Chapter 13 bankruptcy allows a person to create a repayment plan for debts. This method can help people who are struggling to pay their mortgage or car payments or who have high amounts of secured debts. You cannot simply discharge your secured debts in bankruptcy, but Chapter 13 may make it possible for you to repay them comfortably while protecting you from creditor lawsuits.
Credit card debt is typically not secured, and in the course of Chapter 13, a person might pay back some of the debt, but not the total. The amount of unsecured debt to be paid back is based on the Means Test analysis, assets as well as other considerations. While one person may pay back 100% of unsecured debt, another person may pay a smaller percentage.
Hire an Experienced Jacksonville Credit Card Debt Attorney
While the decision to file for bankruptcy is a major one, it can be a huge step toward getting your finances on track. If you are grappling with credit card debts, you could benefit from filing either Chapter 7 or Chapter 13 bankruptcy. Call the Law Offices of Carol M. Galloway at 904-694-5489 to learn how our lawyers can help you.