Everyone intends to be responsible with credit cards, and make good decisions about personal debt, but sometimes it is just not possible to repay unsecured debt. Each state has a unique set of rules for the filing of bankruptcy, but in general, Chapter 7 bankruptcy is intended as a means for consumers to vastly reduce, or eliminate credit card debt or other revolving unsecured debts, including medical bills.
Bankruptcy attorneys are an invaluable resource for any person in California that intends to file for Chapter 7 bankruptcy. Laws, rules of the court, and required forms change frequently, and the process of filing for bankruptcy can be complex. In addition, the rules that determine whether someone is eligible for Chapter 7 can be difficult to understand.
An attorney will know every step of the process for filing Chapter 7, and will also protect the consumer from creditor calls. Bankruptcy lawyers also offer payment plans, for the most part, so consumers can pay the fees in advance, prior to filing.
Credit Cards and Bankruptcy
Credit cards are typically the reason for a bankruptcy filing. Consumers are over their head with unsecured debts, such as credit cards, and can barely make minimum payments. Interest rates increase, payments increase, fees increase, and before long the debt is in default. Filing for Chapter 7 bankruptcy allows consumers to eliminate this debt, and have a fresh start.
Consumer Credit Counseling
Consumer credit counseling is required for anyone filing for Chapter 7 bankruptcy in the state of California. This counseling can be accomplished online, and is intended to help consumers understand how future debt problems can be avoided with responsible spending habits.
Alternatives to Chapter 7 Bankruptcy
Alternatives to Chapter 7 bankruptcy, for consumers that want to avoid bankruptcy, or who wish to pay back at least some of their debts, include:
- Chapter 13 bankruptcy – A Chapter 13 bankruptcy requires consumers to repay a percentage of their debt
- Group Debt Settlement – Consumer debt assistance groups can assist in the process of settling debts, but consumers should research carefully due to the existence of fraudulent debt-help companies.
- Debt Consolidation – If it is possible to consolidate unsecured debts with a lower interest rate, consumers can use this option to repay debt rather than filing for bankruptcy.
- Individual Debt Settlement – Contacting creditors, and negotiating individual debt settlements can benefit consumers that wish to avoid filing for bankruptcy. Often, debtors would prefer receiving some of the balance due than none of the balance due, which is what they would receive in a bankruptcy.