On average, every American has at least 10 credit cards. There are different studies that show that this number can be even higher. There are thousands of people who carry many credit cards in their wallets which they can hardly reasonably afford to pay for. When a country is dealing with a tough economy, this is what happens. This becomes a debt shell game where cash-strapped consumers end up rotating credit cards for paying their debts that are more pressing. And with this, even before they realize it, they are in a situation where their finances are messed up and they are falling behind for payments of the credit cards. If you are wondering how bankruptcy can manage your credit card debts, then our experienced Pittsburgh bankruptcy lawyer can help you.What is Unsecured Debt?
Unsecured debt is the one that is not attached to any real property like your house or car. If you cannot pay, the bank cannot take the things that you have purchased with the card away from you. That is why your credit card is an unsecured debt. Being an unsecured debt, this can be reduced or erased completely with the bankruptcy filing. With the Chapter 7 bankruptcy filing, completely erasing the credit card bills is possible. With Chapter 13 bankruptcy, you can get the repayment plan which will effectively reduce your credit card bills depending on your disposable income. Even though it is possible, our Pittsburgh bankruptcy lawyer will ask you not to get your hopes up as there are many hoops to jump.How Your Household Income Can Affect Debt Expungement
Often debtors want to file for Chapter 7 bankruptcy where they want to go for no asset filing to expunge their debts. But for that, you need to qualify for the means test. If you can show the court that your income is lower than the median income of a family of the same size in your state, then only you will qualify for Chapter 7 bankruptcy. Otherwise, you will be most likely to file chapter 13 bankruptcy which means that the court will give you a repayment plan for paying off your debts. You need to make sure that you are only filing for chapter 7 bankruptcy when your income is low and don’t have enough assets for paying off the debts. If you are trying to beat the system by hiding the right information about your finances, then the court will be harsher.Making Payments for Paying Off the Debts
At times it is often found out that a consumer might have a way better credit score than filing for chapter 7 liquidation. The court will ask for a repayment plan that will help you get rid of the credit card debt. Once the final date of the repayment plan is crossed, the court will expunge the remaining debt. As per our Pittsburgh bankruptcy lawyer, filing for Chapter 13 bankruptcy is a better option as you will get a better plan to clear your debts and keep your assets.