Will Bankruptcy Take Away All My Credit Card Debt?
Over 80% of American households and half of all credit card users struggle with consumer debt. With legal help, bankruptcy can take away, restructure, or reduce your credit card debt, all while stopping collection efforts and creditor harassment.
Not everyone qualifies for full credit card discharge in South Carolina, but most clients who work with the experienced S.C. bankruptcy lawyers at Reed Law Firm, P.A. obtain the relief they need to rebuild their lives free from unmanageable credit card debt. Discuss freeing yourself from credit card and related consumer debts with our debt relief attorneys by calling (803) 726-4888 or connecting with us online.
Understanding Secured v. Unsecured Debts During Bankruptcy Proceedings
When debtors file for bankruptcy, they often have multiple creditors. Certain creditors – known as priority creditors and secured creditors – have the first right to demand repayment.
Secured and Priority Creditors
Secured debts are backed by something of value and most often include your mortgage (secured by the home itself) and auto loan (secured by the vehicle). These creditors have the first right to obtain the proceeds of the property securing the debt. Priority creditors, such as the IRS and family members claiming child or spousal support, have the first right to any remaining assets.
Unsecured Creditors and Credit Card Debts
Credit card debts are unsecured debts, meaning credit card companies are the last entities eligible to receive payment. Most bankruptcy cases involve estates without sufficient assets to cover unsecured debts. This means the bankruptcy court may discharge almost all of your credit card debt following final bankruptcy proceedings.
Discharging Credit Card Debt During Chapter 7 Liquidation
In most cases, debtors eligible to file for Chapter 7 liquidation see all of their credit card debt discharged. You may qualify for Chapter 7 bankruptcy if you do not have the income necessary to cover your reasonable monthly living expenses and debt payments. During Chapter 7 proceedings, the bankruptcy trustee gathers and sells all non-exempt assets. This includes your home, vehicle, expensive jewelry, stocks, and savings accounts.
However, South Carolina law allows you to keep the following:
- Home equity up to $67,100 or $6,700 cash
- Vehicle equity up to $6,700
- Approximately $5,000 worth of home furnishings
- Jewelry up to $1,350
- Any property you own up to $6,700 (wildcard)
- Certain trade tools
After taking your exemptions and paying priority and secured creditors, any remaining money is distributed pro rata to your credit card debts. If there is nothing left, then your credit card debt is discharged completely.
Getting Credit Card Debt in South Carolina Reduced Through Chapter 13 Bankruptcy
If you don’t qualify for Chapter 7 bankruptcy, an experienced attorney might still help you reduce, repay, and potentially discharge credit card debts through Chapter 13. Wage earner’s bankruptcy allows you to restructure your debts, including credit card debts, into a manageable three-to-five-year repayment plan. Any balance remaining once you complete the repayment plan is discharged.
South Carolina Bankruptcy Lawyers for Credit Card Debt
Your mental health and freedom are worth more than your credit score. Do not let credit card debt destroy your life and relationships. Discuss getting all your credit card debt reduced and discharged with our dedicated South Carolina bankruptcy attorneys by calling (803) 726-4888 or connecting with us online.
