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Discharging your debt: When could you be stuck with credit debt?

On Behalf of | Oct 19, 2020 | Bankruptcy

As someone who is looking into bankruptcy, you may have heard that your credit cards could be discharged if you chose a Chapter 7 bankruptcy. That’s usually true, but there are some cases in which you may not be able to have your debts discharged.

The easiest way for you to get those debts discharged is by filing for, and being approved for, a Chapter 7 bankruptcy before asking for the debts to be forgiven. You will need to gather all your debts and show your attorney, so you can prepare to notify the creditors of your bankruptcy and move forward with discharging those debts.

When can’t you discharge credit card debts?

There are times when you won’t be able to discharge credit card debts, even though you have filed for bankruptcy. Some kinds of credit card debts are considered nondischargeable. These include charges that are “fraudulent,” which include cash advances of over $750 in the 70 days prior to your bankruptcy and any luxury purchases of $500 or more in the 90 days prior to filing for bankruptcy. Other charges, like those that are made after you meet with your attorney over the bankruptcy for the first time, may also be considered fraudulent or be unable to be discharged.

If you find that the debts you want to have discharged cannot be discharged due to how recently they were taken on, you may have a few options. One would be to wait longer before trying to file for bankruptcy. Another would be to explain those purchases in a way that the judge considers reasonable, so that they may allow their discharges to occur.

What if you can’t have your credit card debts discharged due to recent purchases?

If you cannot get those debts discharged, you may still be able to move forward with your bankruptcy, but you’ll likely still owe those credit card debts and be asked to pay them back in the future. If that happens, your attorney may be able to provide you with guidance on other methods to cover those debts and reduce what you owe.

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