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How Chapter 7 mitigates credit card debt

Debt is a reality of life for many American households. Florida residents will likely agree that modern life demands expenditures, sometimes beyond what is feasibly affordable. In this case, debt (especially insidious types like credit card debt) can accrue rapidly and leave an individual or family in a precarious financial position. Thankfully, for those facing serious debt, Chapter 7 bankruptcy is a viable option to help ease that burden.

Credit card debt can happen slowly and almost without notice, until letters from creditors begin to arrive. If the debt continues to go unpaid, collection agencies may become involved. This can lead to hassle and stress for everyone in the household, and is often the point at which people begin to consider Chapter 7 as an option to handle their debt problem.

A Chapter 7 filing typically involves a bankruptcy trustee taking a full account of the family's finances, including their assets and accrued debt. Unsecured debt like credit cards can be discharged by the court, while secured debts can sometimes be handled by dissolving existing assets like a home or car to pay down the debt. While a Chapter 7 filing will stay on a credit report for up to 10 years, many services are available to help those who file for bankruptcy to build back their credit over that time.

Many Florida residents regard Chapter 7 bankruptcy with a degree of uncertainty. However, it is important to remember that clearing existing credit card debt is the first step toward financial stability. For those who struggle with overwhelming debt, it can mean the difference between financial collapse and getting rid of overwhelming debt once and for all.

Source: fox25boston.com, "What is Chapter 7 bankruptcy?", Craig Johnson, May 14, 2018

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