Is Credit Card Debt Dischargeable In Bankruptcy?
Many people in South Florida who file for bankruptcy do so at least in part because of extensive credit card debt. If you have a substantial amount of credit card debt, you may be wondering: is my credit card debt dischargeable if I file for bankruptcy? Generally speaking, under the U.S. Bankruptcy Code, credit card debt can be discharged in a bankruptcy case. However, there are some exceptions to consider, especially if you have been making charges on your credit card recently and you are planning to file for bankruptcy soon. Our West Palm Beach bankruptcy lawyers can provide you with more information, and we can assist you from start to finish of your bankruptcy case.
Credit Card Debt is Usually a Type of Dischargeable Debt
Generally speaking, credit card debt is a type of debt that is often discharged in consumer bankruptcy cases. Whether you are planning to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you can usually have your credit card debt discharged. To be clear, the U.S. Bankruptcy Code does not identify credit card debt as a type of non-dischargeable debt. The common types of debts that are non-dischargeable include certain types of tax debt, debt owed from family support. While many people assume that student loan debt is non-dischargeable, it is important to understand that student loan debt can be discharged, but it requires a showing of undue hardship.
Exceptions to Credit Card Debt Dischargeability
While credit card debt is typically dischargeable, it is important to know that the timing of your credit card charges and your bankruptcy filing could impact the dischargeability of your debt. To be sure, if you make charges on your credit card that are not for “necessities” and you do so too close to the date that you file for bankruptcy, these recent charges are unlikely to be discharged. In addition, these charges could result in allegations of presumptive bankruptcy fraud. What is the amount and the type of charge that you need to avoid? And how long before filing do you have to be careful about using your credit card?
If you make charges of more than $800 that are not for necessities, and you make this type of charge within 90 days from the date of your bankruptcy filing, the debt will not be dischargeable. These charges will be described as luxury goods or luxury services. Charges for necessities, differently, can still be eligible for discharge even if they are made within 90 days from the date of your bankruptcy case. Necessities can include, for example, medical bills, utilities, rent, and related charges.
Similar to luxury charges, any cash advances totaling more than $1,100 that are withdrawn from your credit card within 70 days of your bankruptcy filing will not be dischargeable.
Contact a Bankruptcy Attorney in West Palm Beach
Do you need assistance with your bankruptcy case or determining whether specific debts can be discharged? One of the experienced West Palm Beach bankruptcy attorneys at Kelley, Fulton, Kaplan & Eller can talk with you today about your case and your specific financial circumstances.