What Happens to My Credit Card Debt When I File Bankruptcy in Columbus, Ohio
What Happens to My Credit Card Debt When I File Bankruptcy in Columbus, Ohio?
Bankruptcy is something many people consider when they are facing financial hardship. Before you decide if bankruptcy is the best option, there are several questions you’ll need answered that can aid in the decision-making process. Our bankruptcy attorneys at Wood & Brewer have decades of experience helping individuals through this decision-making process. We offer a free consultation because we understand what you are up against.
Does Filing Chapter 7 Bankruptcy Mean Credit Cards Are Automatically Closed?
Credit cards are a type of unsecured debt. When Chapter 7 bankruptcy is filed in Columbus, Ohio, any debt you’ve incurred will be discharged at the completion of the case. The account on the credit cards will also be closed.
If a credit card has a zero balance when the case is filed, we are not required to list it on the creditor schedule. However, a lender may choose to close the account if they obtain knowledge of the bankruptcy filing – every lender is different.
Can You Reorganize Debt by Filing Chapter 13?
Chapter 13 bankruptcy allows you to reorganize your debt. Because credit cards are a form of unsecured debt, the repayment plan is usually paid down over time and typically within 3 to 5 years. At the end of the payment terms, the amount not repaid is discharged.
Are you allowed to keep Current Credit Cards?
Normally, a credit card included in the bankruptcy will be closed. However, a good way to begin rebuilding revolving credit is to obtain a credit card with a small balance and pay it off each month. However, always check with your attorney prior to applying for a credit card, as your Trustee may have rules about this. Bankruptcy and credit card debt can be overwhelming. If you need assistance with the bankruptcy process in Columbus, Ohio and what happens to your credit cards, contact us to assist with your situation. Brian or Katy will be able to review your credit card debt and offer ideas on how the bankruptcy process works.