Credit Card Debt and Bankruptcy

As the holiday season comes to a close, many people may already be starting to worry about their growing credit card debt issues. Statistics indicate that millions of people are still trying to pay the credit card debt that was incurred during the previous holiday season a year after making their purchases. The high interest rates that are attached to credit card purchases combined with excessive holiday gift buying could result in a financial disaster that many people simply cannot find an easy way out of. To avoid finding themselves in the aforementioned financial crisis, consumers should strive to make credit card payments that are higher than the minimum monthly payments. For some, their debt is so high that they even have difficulty paying the monthly minimum payment amounts. If an individual becomes overwhelmed by their credit debt bankruptcy may be an option to help them find a way out of their consumer debt crisis. Upon filing for bankruptcy, the debtor will receive the benefit of the automatic stay, which prohibits creditors from harassing the debtor to make payments on their debt. Some debtors may even receive a complete discharge of their credit card debt through the bankruptcy process. It is important to find out whether your holiday shopping debt is dischargeable in bankruptcy before filing your petition. During the bankruptcy proceedings, if the bankruptcy court concludes that a debtor purposely incurred the debt with the intention of filing for bankruptcy in the new year, the debtor will remain liable for all of the debt that assumed. If you are having trouble dealing with your credit card debt or other consumer debts and are considering filing for bankruptcy, it is critical that you seek the advice of experienced legal counsel to advise you on the options you have in resolving such matters. For more information about credit card debt, bankruptcy, foreclosure or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

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

Eliminating IRS Debt Through Chapter 7 Bankruptcy

Many times a debtor will have a substantial income which results in a tax liability to the IRS, even though their income is still not enough to satisfy the repayment of their debts. When filing a Chapter 7 Bankruptcy it is critical that all the debtor’s debts are discharged or they will be in a very difficult position after bankruptcy. It is possible to eliminate all delinquent taxes in a Chapter 7 Bankruptcy. In order to eliminate the debts you must meet certain criteria including: 1) The tax liability must be at least 3 years old to be eliminated. 2) You must have filed your returns. If you filed for extensions it may make you unable to eliminate the delinquent taxes. 3) The IRS has not filed an assessment against you in the last 240 days. In spite of the above, if you tried to hide from the IRS, you may face a challenge to the discharge. The IRS is very patient, unless you try to avoid them. If this happens, you may still obtain a Chapter 7 Bankruptcy but the substantial IRS debt may remain as a burden you will have to repay. If you are considering Chapter 7 Bankruptcy and have substantial IRS debt, you should seek experienced legal counsel immediately in order to fully protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.