Credit Card Debt Discharge Under Bankruptcy Reform

Can You Still Get Your Credit Card Debt Discharged Under the Bankruptcy Reform Act?

Can credit card debts still be discharged through Chapter Seven?

Any special qualifications?

Tom

The new bankruptcy law makes it harder but not impossible to get credit card debts discharged.

First you have to go through credit counseling at your cost. The counselor is supposed to decide if you qualify for a Chapter Seven discharge or if you have to go through Chapter Thirteen and set up a repayment plan.

This decision will be based on your gross income. If you can pay least $6000 a year for five years and your median income exceeds certain state limits you will be forced into Chapter 13. Average median income for a family of four was $65,100 in 2003, ranging from $46,000 in New Mexico to $82,500 in Massachusetts.

A local attorney or credit counselor can tell you the exact number for you circumstances.

If you are forced into Chapter Thirteen, you will forced to abide by a rather draconian budget set by the IRS, so if you would be forced to take that option, consider it carefully.

Once you go through a Chapter Thirteen, unpaid credit card debts will likely be discharged.

Chapter Seven is supposed to be pretty much as it was in the past, although priority of debtors has been changed somewhat.

The law is new and a lot of this is still unsettled, so find a qualified bankruptcy attorney and have a meeting with him. He will be able to answer all your questions.

For a comprehensive article about the changes caused by bankruptcy reform, read this article.

For a free consultation with a local bankruptcy atorney, click here.