Collection agencies often provide misleading information to consumers about bankruptcy and credit card debt. Many say that wage earners are not eligible for bankruptcy or cannot discharge credit card debt by filing bankruptcy.
Neither is true. In South Carolina, getting rid of credit card debt is the leading reason why people file bankruptcy.
Am I eligible to file bankruptcy?
There are two forms of bankruptcy for consumers: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy is the fastest way to get rid of credit card and other debt. You can discharge 100 percent of credit card debt in Chapter 7 bankruptcy if you earn less than the median income of a household of similar size in South Carolina. Even if you earn more, you may be eligible for Chapter 7 bankruptcy based on your disposable income after deducting certain expenses. To discharge credit card debt, you must not have filed bankruptcy in the past eight years.
Only an experienced bankruptcy attorney can determine if you are eligible to file Chapter 7 bankruptcy.
What if I am not eligible for Chapter 7 bankruptcy?
If you are not eligible for Chapter 7 bankruptcy, you can still obtain relief from credit card debt by filing Chapter 13 bankruptcy.
Chapter 13 bankruptcy is a payment plan that allows you to reduce credit card and many other types of unsecured debt to an amount you can afford to pay. This may be a small percentage of what you owe.
Chapter 13 bankruptcy usually provides greater debt relief and greater protection from creditors than you could obtain through bankruptcy alternatives such as debt consolidation or negotiation.