I am unable to make monthly payments as my credit card debt is too high. Also, as my credit score is too low, debt services and refinancing my mortgage could not help me. What are my options related to credit card debt and bankruptcy?
In your case, you could consider filing bankruptcy under chapter 7 as all of your unsecured debt including medical bills, credit card debts, judgment and personal loans gets waived off or erased. For this, you have to surrender assets that exceed your exemption and if you don’t have any nonexempt assets, you will lose your debts. However, filing bankruptcy under chapter 13 would help you to settle some of your unsecured / unpaid debt over a period of 3-5 years. With this, you may keep assets that exceed your exemption.
Can a credit card company freeze somebody’s bank account or put a lien on assets for not paying off the credit card debt?
Generally, the credit card company is not authorized to do so. First, the company has to sue the person in court and if the verdict allows the company to put a lien on the defaulter’s assets, the company may do so. You would get to know about such actions from the company through a notice if you have been sued. This apart, most states notify the individual that garnishment is going to take place.
I am filing bankruptcy for the credit card debt for a credit card which is being used by both me and my partner and the debt on the credit card is current. Will my partner still be able to use the same credit card?
Yes, your partner should be able to use the same credit card if you are filing bankruptcy for the debt on the same credit card. It is your personal liability and the debt will be discharged if you are filing bankruptcy.
Can I file bankruptcy to wipe out the judgment?
Yes, you should be able to, as bankruptcy can discharge even the credit card debt that has gone to court. The credit card company will have to stop collection once you file your bankruptcy petition.
Credit card debt laws vary from state to state. One should have clear understanding about such matters to handle things in a better way. Under the bankruptcy statute of limitations, if your past dues / unsecured payment are over a certain period of time, you should be able to clear all your debt under the Fair Debt Laws and Fair Credit Laws. If you have any questions on laws governing credit card debt, you should ask a bankruptcy lawyer to guide you.
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