Michigan Bankruptcy Attorney Personalized & Skilled Representation

Discharging Credit Card Debt in Michigan

Is bankruptcy the only way to wipe out credit card debt?

For millions of Americans, repaying credit card debt is an endless battle. If you too are struggling to keep your head above water, it is important to understand that you have options. While filing for bankruptcy is an effective way to wipe out unmanageable debt, there are numerous other ways that you can regain control of your finances. For example, strict budgeting and strategic planning is a good way for you to start chipping away at your credit card debt. If that is not enough, our Michigan bankruptcy lawyer may be able to assist you in negotiating a settlement with the bank or the issuer of your credit card. If you are really in over your head, however, you may want to consider filing for bankruptcy.

How Credit Card Debt is Treated in a Chapter 7 Bankruptcy

If you are unable to get a handle on your credit card debt, Chapter 7 bankruptcy may be the financial solution that you are looking for. Through this debt relief process, you would be able to discharge most, if not all, of your unsecured debt—which means that you would be absolved of the responsibility to repay your overdue credit card bills once the bankruptcy process is over. During Chapter 7 bankruptcy, your non-exempt assets would be liquidated and the proceeds would be used to repay your creditors in order of priority. Since credit card debt is low on the scale, it is unlikely that the credit card company will be repaid at all.

However, the court can choose not to discharge these debts if:

  • You purchased luxury goods on a credit card - If you use a credit card to purchase "luxury goods" or services within 90 days of filing for bankruptcy ($650 or more), a judge can choose not to discharge the debt—as this could be seen as an attempt to defraud the court. However, this excludes any goods or services that are reasonably necessary for the support of you and your dependents (i.e. food, gas and clothing).
  • You used a credit card to take out a large cash advance - If you use a credit card to take out a large cash advance within 70 days of filing for bankruptcy ($925 or more), the debt will be considered "nondischargeable." It will not matter whether or not you used the money to purchase luxury items, as you will still need to show the court that you intended to repay the debt when you incurred it.

Will I repay credit card debt in a Chapter 13 bankruptcy?

Unlike Chapter 7 bankruptcy, Chapter 13 requires you to reorganize your debt and develop a suitable repayment plan—which will be executed over three to five years. You will be asked to repay creditors in order of priority, so whether or not you are able to repay your credit card debt will depend on the type and amount of all other debts that you have incurred. For example, you would first be required to repay all secured loans and priority unsecured debts before touching your credit card debt. If, at this point, you can afford to repay more of your debt, you will be required to do so. Any unsecured debts that have not been repaid at the end of your bankruptcy will be discharged by the court.

Contact Our Firm for a Free Consultation

If you are interested in discussing your case with a Michigan bankruptcy attorney from the Hensel Law Office, PLLC, we encourage you to contact our firm today for a free consultation.

Evening and weekend appointments are available –
call today at (888) 258-0651 to schedule a meeting.

Client Testimonials

  • His knowledge and expertise made a very difficult time in our lives much easier.

    “From start to finish our experience with Mr. Hensel was great. He carefully and thoroughly explained the entire process to us and was always available for any questions or concerns we had. His knowledge and expertise made a very difficult time in our lives much easier. We are very thankful for his help in our situation.”

    Christine and John

  • You made a difficult experience so much easier.

    “Back a few years ago, you helped me through a bankruptcy. I still tell people how you made a difficult experience so much easier, with your clarity, support, and friendly approach to the law. I'm still very appreciative for all your help – it really helped to pull me out of a difficult place and put my life back on track.”

    Eric

  • Sincerest thanks for all of your help in affording me what I consider a real "fresh start."

    “I wanted to give you my sincerest thanks for all of your help in affording me what I consider a real "fresh start". My divorce was unfortunate but definitely a needed change for the better. However, the financial side of things still seemed to keep that past linked, which makes this an enormous weight lifted. I just can't believe the impact it's made on my outlook with...everything.I will be sure to keep your business cards handy to distribute along with highly favorable words of recommendation should the needs arise.Thank you again for your time and professional guidance.”

    Michelle

  • He always responded quickly and intelligently.

    “Mr. Hensel made a difficult and uncomfortable situation as easy as possible for me. He always responded quickly and intelligently to my questions and never made me feel as if I were bothering him. He explained the unknown aspects of bankruptcy, the court system, and my options in clearly understandable terms. I felt confident that he was handling my case in the best possible manner and in my best possible interests. I feel lucky to have found the Hensel Law Office and I never hesitate to refer others who could use assistance - because I know they will get superior service and help.”

    Kelly

  • I greatly appreciate your time and effort.

    “It was a great pleasure and relief working with you through that tough time. I greatly appreciate your time and effort on our case. I will gladly and confidently recommend you to anyone I know facing a tough financial time requiring your expertise.”

    Jay