Can bankruptcy erase my credit card debt?
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Can bankruptcy erase my credit card debt?

| Oct 13, 2020 | Bankruptcy

Part of what makes credit card debt so dangerous is how fast it can pile up without a debtor noticing. Even those who watch their spending like a hawk can accrue massive debt if they experience a sudden job loss, medical emergency, or property damage. There comes the point in debt where the interest outweighs the amount you can pay off each month, but when can you do when you come to this point?

Many people may not know what bankruptcy is, much less what it can do for you. Bankruptcy can often discharge debt for an applicant, but not all types. There are two forms of debt, secured and unsecured debt, and bankruptcy can only discharge unsecured debt. Does that mean that bankruptcy cannot discharge credit card debt?

The difference in debts

There are two types of debt that anyone can earn: secured and unsecured. Secured debt is a form of debt that comes with collateral tied to it. Examples of this debt include home loans or car loans. Any debt that connects to some asset is likely a secured debt.

Unsecured debts are debts without collateral. Examples of this debt include medical debt, utility bill debt, and credit card debt. When bankruptcy finalizes, it will likely discharge your credit card debt since it is an unsecured debt.  

Fight to be debt-free

Bankruptcy can free an applicant from crippling financial hardship, but earning it is not easy. A bankruptcy attorney knows how to complete an application swiftly and efficiently. If you want to free yourself from credit card debt, consult with an experienced bankruptcy attorney to consider what options you have.