Credit Card Debt Can Be Eliminated in a Chapter 7 Personal Bankruptcy

| Jan 11, 2016 | Chapter 7 |

Credit card debt can be eliminated in chapter 7 personal bankruptcy in many instances. Often credit card debt can become overwhelming because of a drop in income, because of a divorce, because of an illness or other reasons. Bankruptcy is often the best option in eliminating this credit card debt. In a bankruptcy, the court is going to consider your income compared to your expenses as well as the equity in your assets. However, even if you have some equity under bankruptcy law there are exemptions that are allowed. The exemptions in New Jersey and Pennsylvania may differ from states where various state exemptions are added to the Federal exemptions. By way of example, if a married couple owns a home in, say, Cherry Hill New Jersey or Voorhees New Jersey and the home is worth $300,000 and there is a mortgage of $260,000, because they can each exempt approximately $24,000 worth of equity in their home for bankruptcy purposes they would be able to protect the equity in their home and they would be in a position to file a Chapter 7 and eliminate their credit card debt. As indicated, income and expenses would also be taken into account to determine whether there is disposable income. An experienced bankruptcy attorney can assist in determining whether Chapter 7 is the best option.