Questions about bankruptcy?
Olympia, WA Bankruptcy Attorneys
Can an Olympia bankruptcy wipe out all of my credit card debts?
If you qualify, yes it can!
Drowning in credit card bills?
Stop all harassing phone calls immediately!
Call now to learn how.
(360) 350-3435
What Happens to Credit Card Debts if I file an Olympia, WA Bankruptcy?
Credit cards are usually a kind of “unsecured debt” that is usually completely discharged in bankruptcy. “Unsecured” means that there is no collateral for the loan, like a car or a house.
But there are some complications that can come up that may affect if, or how much, credit card debt can be discharged in your Washington State bankruptcy.
Possible Complications:
1. Cash advances or significant credit card use, knowing that you do not intend to pay it back.
This can cause problems because it is basically fraud, and the credit card company may be able to sue you in the bankruptcy court and force you to pay them anyway. If someone tells you to use or max out all your credit cards before your bankruptcy, don’t listen to them!
2. Credit Card Debts in Divorce Cases.
If you lived with your husband or wife in a community property state like Washington or California, and incurred credit card debt while together and married, your ex-spouse may be able to challenge your ability to discharge those debts in a bankruptcy. If a divorce court ordered you to pay them – even if they are in just your name- your ex might be able to prevent you from discharging them.
This is because even a divorce doesn’t change the rights of the credit card companies to go after your ex-spouse for community debt—the divorce order doesn’t change the credit card company’s rights at all, it just gives your ex the right to go after you if you don’t pay those debts.
This is part of why it is critical to speak with an experienced Olympia bankruptcy attorney before getting divorced!
3. You are in a chapter 13 court-approved payment plan.
Sometimes people who file a chapter 13 have to pay at least some of their credit card debt back. We will work hard to keep the amount paid to credit cards as low as possible, if that is your goal.
4. You have a lot of assets, and you are in a chapter 7 case.
If you have more assets, like cars that are paid off, jewelry, houses, and other things, a chapter 7 trustee may be able to sell some of those things to pay all or part of your debt. That is why it is very important to work with an experienced Olympia bankruptcy firm like ours, to protect as much as possible in your case.
5. The credit card company sued you and got a judgment, and you own real estate.
If the credit card company has already sued you and has obtained a judgment, this can make matters more complicated because they may have a lien on your house, just like a mortgage. If this is the case, please bring it up right away during your initial consultation with one of our Olympia bankruptcy attorneys.