Options For Handling Credit Card Debt

Many New Jersey residents have accumulated credit card debt they can no longer afford. Whether using credit cards to make ends meet due to a temporary loss of a job, unexpected medical expenses, damages due to Hurricane Sandy or simply as a result of increased monthly expenses, if the minimum payments are not paid there are options. One one option is to speak directly to the credit card companies for a forbearance, which temporarily suspends your payments for up to a few months, or negotiate to lower the interest rate and fees or a debt settlement of a lower amount than what is owed. If the credit card debts are overwhelming or the credit card companies are unwilling to negotiate another option is to file for bankruptcy. Filing a Chapter 7 allows for the elimination of dischargeable debts so that your personal liability for that debt ends and creditors cannot seek further payment. Not all debts are dischargeable however. Filing a Chapter 13 where a reorganization plan is created allows for the elimination of dischargeable debts when payment is complete so that your personal responsibility for that debt ends upon discharge. Before filing bankruptcy, it is important to meet with experienced legal counsel to discuss whether creditors may challenge your bankruptcy petition. A creditor may challenge the discharge of the debt by filing an adversary proceeding in the bankruptcy court if they believe the debt was incurred due to fraud, because the information provided for the credit application was not incorrect, the credit limit was exceeded purposefully, the credit cards were still being used close to the bankruptcy petition being filed, the types of purchases made were for luxury items, or cash advances taken, for which they have to prove in the court. Honest use of a credit card will be defendable against a challenge and permissible for discharge either under the Chapter 7 or Chapter 13 Bankruptcy. If you have outstanding credit card debts and want to discuss your options you should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding credit card debt, bankruptcy, foreclosure, or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and is in no way intended to replace the advice of an attorney regarding your specific matter. Our law firm is a debt relief agency and helps people file for bankruptcy relief. Contributed by Tracy Luciano