Credit Card Debt Bankruptcy
When a customer fails to pay for the money he used, when using the credit card of a credit card of the company, (the company charges penalty or late fee), debts continues to grow, as the customer delays his payments and as interest grows on, sometimes, the penalty itself amounts to a huge amount the customer may not be aware of.
The customer may request for some relieve, and they may reduce their annual percentage rate. Even then, if the customer is unable to pay his debts, he declares and files for bankruptcy, and hence the term, credit card debt bankruptcy.
The defaulter, i.e., the customer, may also be offered other kinds of deals, like removal of past late fees, reduced APRs and others.
If the customer files for bankruptcy, the credit card companies are obliged by laws to discharge if not all then most of his dues, unless some one successfully challenges it or bankruptcy judge, irrespective of the creditor’s challenges, blocks it on legal grounds.
The company can challenge, your credit card debt bankruptcy using the ‘non-dischargeability actions’ claiming the debt was incurred through unfair means, and thus is exempted for the discharge rules.
Your credit is non-dischargeable, if your application for the card wad fake and you used the card with the intent to never pay back, (the most common cases).
The company may also challenge your credit card debt bankruptcy, on your increased usage of card, just before filing, opening a new account, a huge amount of cash months before filing, recent usage of card for travel and vacations, crossing the credit limit.
And also having a reasonable amount of cash available at the time of the filing, also on your recent purchase of a luxury good, and on the ground that the charges were made after consultations with his attorney.
The longer the gap between the recent credit card activities, and filing the credit card debt bankruptcy the less likely, that the company may challenge your bankruptcy. You should avoid using the card once you file for credit card debt bankruptcy, the company may challenge that you have no intention to pay.
Therefore, wait for a longer time before you file for credit card debt bankruptcy, so that this buys you some time, and adds more payments to your account; it will be at your advantage if a company files for ‘non-dischargeablity actions’.
You can also opt for out of court settlement, instead of wasting your years on doing the rounds of courts, if not then you can sue the company as well, who knows you might be lucky.
The credit card debt bankruptcy is entirely due to credit cards. But we cannot put the entire blame on the credit card or the company that issues them to us. In fact, credit card has made life much easier.
It has become a convenient and an easy way to access money, whenever we need or want it, or where ever we need it. We cannot think of life without credit cards, thanks to our habits of spending on extravagance and delaying the payments.