If you are unable to pay your credit card debt, it may be in your best interest to consider filing for Chapter 7 bankruptcy. Submitting a bankruptcy petition to a Florida judge may entitle you to an automatic stay. Let’s take a look at the other potential benefits of filing for bankruptcy and how to tell if doing so is right in your situation.
What are the potential benefits of filing for bankruptcy?
Filing for Chapter 7 bankruptcy may allow you to eliminate your outstanding credit card debts without paying anything to creditors. In some cases, you may be allowed to keep the equity that you accrued in a home, car or other assets that might be seized by the trustee overseeing your case. Finally, it may be possible to get a discharge in a Chapter 7 proceeding in a matter of weeks as opposed to several years.
How do you know if bankruptcy is appropriate for you?
Filing for bankruptcy may be best if your lenders won’t work with you to reduce your interest rate or monthly payment. It may also be a good idea if you don’t qualify for a personal loan or balance transfer to consolidate your debt at a lower interest rate. A Chapter 7 proceeding may also be in your best interest if you don’t have any assets that might be liquidated.
If you have credit card debt, it’s important to have a strategy to pay it off quickly. Otherwise, you may spend thousands of dollars in interest and other fees that could instead be used to build a retirement fund or an emergency fund.
