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Can you eliminate credit card debt by declaring bankruptcy?

Can an individual eliminate credit card debt by declaring bankruptcy? I didn't think you could wipe it out, just get the bill collectors off your back. But, someone told me that it depends on which chapter of bankruptcy you use. The right one WILL eliminate credit card debt. I know someone who has $80,000 in credit card debt and they are trying to do that to get rid of that debt! Is it really possible? Are there any restrictions in doing this. Can you ever get a credit card again if you do it?

Public Comments

1. yea u could wipe it out my sister did it she own alot of money she file for bankrupt and now she credit free but she cant have credit untill 7 yrs
2. That is correct. Chapter 7 essentially wipes out the debt, while Chapter 13 sets you up on a payment plan with your creditors for a small percentage of the amount owed. Which chapter you qualify for is based off of your disposable income. If you do your homework before you file, you can have good credit again within as little as 2 years.
3. Yep my husband and I did it. Best decision we ever made. It will show up on your credit report for 7-10 years. But we were able to get credit-just at a higher interest rate. In fact we bought our house four years after the bankrupcy with no money down. There are two chapters in which you can file under, 7 and 13. I don't remember which is which. But I recommend the one that wipes out your bills, not the repayment plan. They both show up as a bankrupcy and they both have the same effect on your credit. May as well start fresh. You can keep your car and house. If you have a loan on those you can keep paying, just don't include those on the list of bills you wish to go bankrupt.
4. There are some criteria which you need to fulfill to file bankruptcy. Yes filing bankruptcy would eliminate your debts but it will depend upon which chapter you are filing i.e. chapter 7 or 13. But bankruptcy should be your last option as bankruptcy remains on your credit report for more than 10 years and till then you would have problems purchasing, taking loan and leasing and even after that you would have to build your credit from start as having filed for bankruptcy results in 160-220 point deduction on their credit score. So its advisable to first try paying the debts. If you are not able to manage your debts there debts consolidation companies out there who help you to pay your debts in a systematic manner by providing you an affordable debt management plan. I know a debt consolidation company named http://ezconsolidation.com who can help you out clearing your debts.
5. That person with $80,000 should get rid of their financial immaturity and irresponsibility. That will go a lot further than trying to file bankruptcy and going credit counseling classes to TRY to eliminate the debt. Tell the friend to DIG DEEPER.
6. A Chapter 7 bankruptcy is a legal proceeding in federal bankruptcy court which can release you from any necessity to ever paying your debts, including credit card debt. But, In doing this, however, you do stand to lose any non-exempt assets you may have (stocks, bonds, cash in savings accounts, valuable artwork, etc) to the trustee-in-bankruptcy appointed by the court. These are ordinarily sold and distributed amongst your creditors. This includes any income tax refunds that are due to you. To qualify for Chapter 7, you must pass a means test proving that your income is less than the median income for your family size in your state. If you fail the means test, you will not be allowed to file Chapter 7. Instead, you can file Chapter 13. Since bankruptcy laws are so complex, it’s a good idea to seek advice from an attorney before filing for bankruptcy. This is the best way to ensure your paperwork is filed completely and accurately.
7. There are a number of factors involved. A site I've used for info in the past ... http://debt.knowledged.info/credit_card.html Hope that helps.