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The accumulation of credit card debt can become overwhelming in a hurry thanks to high minimum payments and even higher interest rates. Even if you only plan to use credit cards in an emergency, if that emergency lasts several months, the balance, along with fees, interest, and penalties, can leave you staring at a credit card bill that you can hardly believe.
Bankruptcy is a reasonable solution to a financial crisis. If you’ve been struggling to pay the minimum balance on mounting credit card debt, if you’re concerned with foreclosure or repossession, or if you’re being pressured by collectors at home and work, a Chapter 7 or Chapter 13 bankruptcy can give you the ability to restructure or erase a majority of your debt. Bankruptcy can stop wage garnishments, harassing phone calls, and impending foreclosures and repossessions.
If you are like most people, you probably don’t know much about bankruptcy. The first thing you should know is that bankruptcy offers a way out of your financial difficulties. The second thing you should know is that you don’t have to go through this process alone.
Our team of Denver debt relief attorneys has handled hundreds of bankruptcy cases in Colorado just like yours, from Montezuma County to Yuma County and everywhere in between. We offer a free case evaluation to new clients so that we can go over the details of your unique circumstances and begin to map out a debt relief solution.
According to Debt.org, the average Coloradan owes over $6,000 in credit card debt. And one of the most common reasons people file for bankruptcy in Denver is due to overwhelming credit card debt.
If you’re thinking about filing bankruptcy for credit card debt, you first need to understand that, in most cases, credit card debt is considered unsecured debt. This means you don’t have an asset that is backing up the amount of money you owe. A secured debt, such as a mortgage, holds an asset like your home as collateral, meaning the creditor can take the asset away from you if you don’t pay.
In Denver, the statute of limitations on debt is three years for written contracts, oral contracts, promissory notes, and open-ended accounts. Denver is one of the few states where time limits for collecting debt are the same across every different platform.
The purpose of a statute of limitations for credit card debt is to prevent creditors from taking consumers to court long after evidence of the debt has been discarded or disappeared.
Debt collectors can still try to collect a debt after the statute of limitations expires, but can’t take you to court to get a judgment for it.
This does not, however, mean that you should simply max out all of your credit cards and wait for the statute of limitations to come into effect. First and foremost, because that means you’ll have to suffer through at least three years of constant contact via phone, e-mail, and letters from the collections company attempting to collect payment.
Secondly, unpaid credit card debt can tank your credit score, which could affect your ability to buy or rent a home, finance a car, or even in some cases affect your ability to get a new job.
If you’re facing insurmountable credit card debt, you would be better served by tackling the problem head-on, which may mean filing for bankruptcy. For more information on credit card debt relief options, contact one of our Denver County area bankruptcy attorneys.
If you’re struggling with credit card debt, you may be considering bankruptcy as a way to get a fresh start. However, the bankruptcy process can be complex and confusing, so you probably have a ton of questions. You are not alone. Listed below are some of the most commonly asked questions about credit card debt, answered by our experienced Denver debt relief attorneys.
1. Will filing for bankruptcy clear my credit card debt?
Maybe. Whether your credit card debt is discharged is dependent upon whether you file for Chapter 7 or Chapter 13 bankruptcy. Because credit card debt is unsecured, it will automatically be discharged if you file chapter 7 bankruptcy, but if you file chapter 13 bankruptcy in Denver County and the surrounding areas, your credit card debt will be made a part of your debt repayment program.
2. Can I use my credit card after I file for bankruptcy?
Typically, you cannot keep credit cards if you file for bankruptcy. When filing the petition for bankruptcy through the United States Bankruptcy Court District of Denver, you must submit any and all debts you owe to creditors, including credit cards. Even if you have a card in your name with a zero balance, that creditor will still be made aware of your petition to file bankruptcy and you will likely have that credit card canceled.
3. Should I max out my credit cards before filing for bankruptcy in Denver?
NO! Maxing out your credit cards when you know that you’re about to file for bankruptcy is considered fraud. The defrauded creditors could object to your discharge. If that happens, the court may allow the defrauded creditor to collect some or all of the credit card debt or, worst-case scenario, dismiss the bankruptcy case completely.
4. Will I be able to get new credit cards after bankruptcy has discharged my debts?
Generally, individuals who file for bankruptcy have been able to obtain credit within a few months of completing their bankruptcy case. As a matter of fact, getting a secured credit card is an excellent way to build your credit score back up after filing for bankruptcy. Unlike traditional credit cards, which offer you a pre-set spending limit, secured credit cards require you to pay a cash deposit upfront to guarantee your credit line.
5. Can I declare bankruptcy on credit card debt alone?
Unfortunately, bankruptcy doesn’t have a pick-and-choose option. If you decide to file for Chapter 7 or Chapter 13 bankruptcy in the State of Colorado, you must declare all of your debt when submitting your paperwork to the Court. This includes medical debt, past-due mortgage or vehicle loan debt, and of course, credit card debt. This, of course, presupposes that if you’re filing for bankruptcy, you have more than just credit card debt that needs to be discharged. For more information about what debts bankruptcy can and cannot discharge, please contact one of our Denver debt relief attorneys for a consultation.
Whether you’re struggling with mounting credit card debt or falling behind in your mortgage, you may want to discuss your options with a Denver bankruptcy attorney.
Let’s face it, a crisis happens when we least expect it. An economic downturn can cause you to lose your job through no fault of your own. A medical emergency can leave you with bank-breaking bills. Natural disasters can destroy the home you worked diligently to build. Sometimes, insurance and savings are just not enough. Maybe you reached for the credit card to pay some of the other bills that have been adding up and now you can’t afford the minimum payments. That’s why bankruptcy protection exists.
Bankruptcy is never an easy decision. If you are considering bankruptcy, then choosing the right attorney becomes your most important task. When you need a fresh financial start, our firm of Denver County area debt relief attorneys is here to assist you in tailoring the perfect plan to protect the things you value most. From discussing your options and eligibility to representing you during meetings and in court, our team of experienced legal professionals will provide the experienced, personal attention necessary to get you back on track.